D is corrent. An individual whose tax liability is not sufficiently covered by withholding must pay estimated tax in quarterly installments or be subject to penalty. Generally, there will be no underpayment penalty if amounts withheld plus estimated payments are at least equal to the lesser of 90% of the individual’s current year’s tax (determined on the basis of actual income or annualized income), or 100% of the preceding year’s tax. An individual whose AGI for the preceding year exceeds $150,000 must use 110% (instead of 100%) if s/he wishes to base his or her current year’s estimated tax payments on the preceding year’s tax liability. The use of the adjusted seasonal installment method is available to corporations, but is not available for individuals.
A is incorrect because the use of the seasonal method is not available to individuals.
B is incorrect because the annualization method can be used.
C is incorrect because the use of the seasonal method is not available to individuals.
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