Question

Kara files her income tax return 64 days after the due date of the return without obtaining an extension from the IRS. Along with the return, she remits a check for $15,400, which is the balance of the tax she owes. Note: Assume 30 days in a month.

Required:
Disregarding the interest element, enter Kara's penalty amount for each, failure to file and failure to pay.
Failure to pay________$
Failure to file________$

Answer 1

failure to file :$2079

failure to pay:$231

Step-by-step explanation:

given data

remits a check = $15,400

days in a month = 30

return = 64 days

solution

computation of Kara's penalty amount for failure to pay

failure to pay will be

failure to pay = 0.5% of tax owed × number of months .......................1

failure to pay = 0.5% × $15400 × 3

failure to pay = $231

and

Computation of Kara's penalty amount for failure to file

failure to file will be

failure to file = (5% of tax owed × number of months or part thereof) - failure to pay penalty .......................2

failure to file = (5% × $15400 × 3) - $231

failure to file = $2310 - $231

failure to file = $2079