Liama MacDonald just turned thirty years old. She is currently single. Liama has gross wages of $95,000 (before deferrals) and has had $14,000 withheld for federal income tax. Given the information presented below, and in the chapter, will she likely have too much or too little withheld for the current tax year (do not consider AMT in your calculations)? Based on your analysis, what should Liama do?

•She estimates total itemized deductions of $11,450.

•She will not have any interest or dividend income or capital gains.

•She will not contribute to an IRA.

•She will defer 5 percent of her gross salary into the qualified retirement plan.

Answer rating: 100% (QA)

To determine whether Liama MacDonald will likely have too much or too little withheld for the current tax year we need to consider her estimated total ... View the full answer