A self-employed individual with a previous tax liability of $3,900 must pay what minimum amount of prepaid taxes to avoid a penalty?

To determine the minimum amount of prepaid taxes a self-employed individual must pay to avoid a penalty, it's important to understand the safe harbor rules that apply to estimated tax payments. For individuals with a prior tax liability, the IRS typically looks at the previous year's tax obligation.

In this case, the individual has a previous tax liability of $3,900. To avoid an underpayment penalty for the current tax year, the individual must pay at least the amount of their previous year's tax liability. This means that making estimated tax payments of at least $3,900 in the current year fulfills the requirement to avoid penalties for underpayment.

It's essential to keep in mind that the other amounts presented are either higher than necessary or do not relate to the previous year's liability. For example, paying more than the previous year's liability, such as $4,050 or $4,500, exceeds the minimum requirement, while a lower amount would not satisfy the safe harbor option. Therefore, the correct minimum prepaid tax amount to avoid a penalty is indeed the figure matching the previous liability.