Olivia filed her tax return on time but did not pay her taxes until four months...

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Question

Olivia filed her tax return on time but did not pay her taxes until four months...

Olivia filed her tax return on time but did not pay her taxes until four months after they were due. She owed $20,000. What is her late payment penalty amount?

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Answer 1

Answer #1

If a taxpayer fails to pay the balance due shown on the tax return by the due date (even if the reason of nonpayment is a bounced check), there is a penalty of 0.5% of the amount of unpaid tax per month (or partial month), up to a maximum of 25%.

1 )So accordingly, 0.5% of $20000 for four months is, $20000*0.5%*4 =$400

Maximum of 25%= $20000*25%= $5000

So Olivia has to pay $400 as her late payment penalty fees.

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Answer 2

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Olivia filed her tax return on time but did not pay her taxes until four months...

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