Question

Wilson filed his individual tax return on the original due date but failed to pay 700 in taxes that were due with the retun. If wilson pay the taxes exactly 2 months late, calculate the amount of his failure to pay penalty. $-----.

Answer 1

Solution :-

Here we ned to findout the amount of his failure to pay penalty.

Penalty = Tax due * Time period * rate of penalty per month

Where ,

Tax due = $700

Time period = 2 months

Rate of penalty per month = 0.5%

Finally ,

Penalty @ 0.5% = $700 * 2 months * 0.5%

= $7

Penalty @ 0.5% = $7

Penalty @ 25% = $700 * 25%

= $175

Penalty @ 25% = $175

In this two penalty's which is less , that one we should consider as a penalty of Wilson.

so, Final answer is,

Amount of Wilson failure to pay penalty is $7 .

Note :-

• Inability to-pay punishment is 0.5 percent every long stretch of unpaid duties constrained to 25% of the net measure of the expense due. Based this condition we are calculated this sum.