[Oneday]

Hi, this Ninja MCQ question is confusing me:

A CPA’s adjusted gross income (AGI) for the preceding 12-month tax year exceeds $150,000. Which of the following methods are available to the CPA to compute the required annual payment of estimated tax for the current year in order to make timely estimated tax payments and avoid the underpayment of estimated tax penalty?

The annualization method

The seasonal method

A.

I only

B.

II only

Incorrect C.

Both I and II

D.

Neither I nor II

I chose C since I know there are both Annalization Income method and Seasonal Method for estimating tax. However, the answer solution says “There is no safe harbor method called the seasonal method.”.

Can someone help me understand why seasonal method is not part of the answer?

Thank you.

[Anonymous]

While I know it doesn't sound right, the Annualized Income Installment Method is what you use for seasonal income. If you need more info, see Publication 505 on the IRS website.

[Oneday]

Thank you for the answer! I use Roger CPA Review for lectures and he used the terminology “Seasonal Method”, so I thought it is one of the methods of Safe Harbor method.

[Author]

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