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Using the short method in Part III of Form 2210 - Underpayment of Estimated Tax by...

Using the short method in Part III of Form 2210 - Underpayment of Estimated Tax by Individuals, Estates, and Trusts, Alvaro determines his total underpayment of his estimated taxes for 2018 was $2,000. If he meets all other conditions and the entire amount was paid on or after April 15, 2019, what is the amount of his underpayment penalty?

A. $0

B. $72

C. $85

D. $95

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Answer #1

Your required answer is option B i.e. $72,

As per short method part III of form 2210

Step 1: Total underpayment for the year X .03603

= $2000 X .03603

= $72

Step 2: If the underpayment for the year amount was paid on or after 4/15/19 then 0 (Zero) otherwise Amount of underpayment for the year × Number of days paid before 4/15/19 × 0.00016

therefore in this case 0

Step 3: Step 2 - Step 1

=$72-0

=$72

I hope this clear your doubt.

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