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case, each required installment of estimated tax is equal to 25
percent of the “required annual payment”, which in turn is equal
to the lesser of (1) 90 percent of the tax shown on the
individual’s return for that year (or, if no return is filed, 90
percent of his or her tax for such year), or (2) if the
individual filed a return for the immediately preceding taxable
year, 100 percent of the tax shown on that return. Sec.
6654(d)(1)(B)(i) and (ii). The due dates of the required
installments for a calendar taxable year are April 15, June 15,
and September 15 of that year and January 15 of the following
year. Sec. 6654(c)(2). For purposes of section 6654, an
individual’s tax consists of income tax and self-employment tax
and is determined before the application of any wage withholding
credit17 (but after the application of other allowable credits).
Sec. 6654(f); see sec. 31.
There are two mechanical exceptions to the applicability of
the section 6654 addition to tax. First, as relevant to this
case, the addition is not applicable if the tax shown on the
individual’s return for the year in question (or, if no return is
filed, the individual’s tax for that year), reduced for these
purposes by any allowable credit for wage withholding, is less
17 Under sec. 6654(g)(1), wage withholding credits are
treated as payments of estimated tax.
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