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Kelli did not file for an extension and files her tax return on July 6. The balance of her tax owed is $2,000. Disregarding the interest element, for how much should she write a check to cover what she owes?

a. $2,370
b. $1,970
c. $2,400
d. $2,520
e. $2,390

User AbdAllah
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1 Answer

3 votes

Final answer:

Kelli should write a check for the amount of her unpaid tax plus late filing penalties. Assuming no interest and a late filing penalty of 5% per month, the total after about three months would be approximately $2,300, which is not an option listed.

Step-by-step explanation:

If Kelli did not file for an extension and files her tax return on July 6, which is after the usual April 15th deadline, she will likely be subject to late filing penalties. To calculate how much she should write a check for, we need to consider both her unpaid tax liability and the additional penalties for filing late.

The Internal Revenue Service (IRS) charges a failure-to-file penalty which is generally 5% of the unpaid taxes for each month or part of a month that a tax return is late, up to a maximum of 25%. Given that Kelli has a balance of $2,000 tax owed and files almost three months late, her first month's penalty will be 5% of $2,000, which is $100.

For the second and third months, we would also add $100 for each month, totaling $300 in penalties (assuming the $2,000 remains unpaid). Therefore, adding the original tax owed of $2,000 to the penalty of $300 results in a total of $2,300 that should be paid to cover the taxes and penalties.

Since none of the answer choices precisely match the calculated amount, and the question specifies to disregard interest, she would need to write a check closest to the amount of $2,300. However, as this amount is not given in the answer choices and we are to disregard any interest, it is likely we do not have enough information to select the correct answer from the provided options.

User Zinga
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