What amount does Ray owe for the underpayment penalty in 2023 if he made no estimated tax payments?

In the context of underpayment penalties for federal taxes, there are specific criteria that must be met for a taxpayer to incur such a penalty. Generally, IRS underpayment penalties can arise if an individual does not pay enough tax owed during the year, either through withholding or estimated tax payments.

For a taxpayer to avoid an underpayment penalty, they must generally satisfy one or both of the following conditions:

1. Pay at least 90% of the tax they owe for the current year.

2. Pay 100% (or 110% for higher income earners) of the tax shown on the prior year's return, assuming that return covered all 12 months.

If Ray made no estimated tax payments for 2023, his potential underpayment penalty would hinge on whether he met either of these criteria. If, for example, Ray had a low tax liability for the previous year and his estimated tax due for the current year is less than his payments (actual withholding or prior year comparison), he could be exempt from the penalty.

In this case, if it is affirmed that Ray did meet one of these criteria—for instance, if his taxes based on withholding or prior year amounts were sufficient—then it follows he owes $0 in underpayment