Question

Violet's tax liability was $5,000 and withheld tax and estimated tax payments were $4,500. He had not applied for extension and filed his tax return 8 months after the due date. Which of the following statements is correct regarding penalty for failure to file a tax return?

No penalty is applicable as the tax due is less than $1,000.

A minimum penalty of $100 may be assessed.

Penalty is applicable on $5,000.

Penalty is applicable on $500 tax due.

Answer 1

Penalty is applicable on $500 tax due.	Correct
He  owe $500 and are 8 months late, the late-filing penalty would be $200 { ($500 x 0.05) x 8  = 200}