It is the end of the year, and Greg and Gina need to know if they should make an estimated tax payment for 4th quarter 2015; they want to file a...

It is the end of the year, and Greg and Gina need to know if they should make an estimated tax payment for 4th quarter 2015; they want to file a joint tax return. They have a 4-year-old daughter.

Compute their required 4th quarter payment, using both methods (current year and prior year), and then recommend how much they should pay on 1/15 to avoid underpayment penalties and how much remaining tax they will owe on 4/15 when they file their 2015 income tax return, if any. They have not made any tax payments for 2015 so far, other than withholding from wages. Disregard/do not compute the Alternative Minimum Tax and/or the Net Investment Income Tax, and assume only regular income tax applies for purposes of this assignment.

SHOW ALL OF YOUR WORK, including your determination of income, deductions, taxable income, amount of tax, and computations of estimated tax due using both methods. 55 points

Greg’s annual salary - $60,000 Greg’s federal tax WH from paycheck - $11,100 Greg’s state tax WH from paycheck - $2,850 Greg’s city tax WH from paycheck - $1,200 Gina’s annual salary - $37,000 Gina’s federal tax WH from paycheck - $2,050 Gina’s state tax WH from paycheck - $1,480 Interest income from corporate bonds held for investment - $3,100 Interest income from US government obligations - $1,100 Dividend income (ordinary, not “qualified”) - $3,355 Cash grand prize won at local festival - $20,000 Mortgage interest paid - $5,800 Real estate taxes paid - $2,200 Daycare expenses - $4,700 Their 2014 AGI was less than $150,000, and the amount of their 2014 tax was $13,080.