If Brad files his last year's individual tax return on July 5 of the current year after having requested an extension, what is the amount of his failure- to- pay penalty if his total tax is $10,000 and he paid $9,500 through timely withholding and $500 with the return?

Question

Quizplus · Accepted Answer

The failure-to-pay penalty is calculated as 0.5% of the unpaid tax for each month or part of a month that the tax remains unpaid. Brad's unpaid tax is $10,000 - $9,500 - $500 = $0. Therefore, his failure-to-pay penalty is $0.

If Brad Files His Last Year's Individual Tax Return on July