Question

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connect.mheducation.com/flow/connect htm ework Assignment Help Save Victoria's 2018 tax return was due on April 15, 2019, but she did not file it until June 12, 2019. Victoria did not file an extension. The tax due on the tax return when filed was $10,400. In 2018, Victoria paid in $17,700 through withholding. Her 2017 tax liability was $15,300 Victoria's AGI for 2018 is less than $150,000. How much penality will Victoria have to pay (disregard interest? 3 8 9 3 4 5 6

Answer 1

Answer:

Total tax liability 2019 = Withholding + Tax due = $17,700 + $10,400 =$28,100

2017 Tax liability = $15,300

Since 2019 withholding is more than tax liability last year, Victoria complied with required estimated tax payments. The required estimated tax is smaller of (i) 90% of 2018 tax liability and (ii) 100% of 2017 tax liability.

Since Victoria did not file an extension, the due date for filing is  April 15, 2019 but she did not file until June 12, 2019

The late filing penalty is 5% of the owed tax amount for every month (or fraction thereof) up to a maximum of 25%

The late payment penalty is 0.5 of the due tax amount for every month (or fraction thereof)

Since, both the late-payment and late-filing penalties apply for the period from April 16 to June 12, 0.5% late-payment penalty is waived.

Hence Penalty = (5% + 0.5% - 0.5%) * 2 months * 10400 = $1,040