Ms.Deveco's 2011 income tax return is due on April 30, 2012 While she is too busy to file her tax return on that date, she remits a check to the government for $10,000, her esti- mated amount of net tax owing on that date.She has never filed a late return before.She prepares and files her tax return on May 31, 2012.At this time, the return shows that her actual net tax owing was $9,800.Assuming that the interest rate applicable to late pay- ment of taxes is one-half percent per month without daily compounding, how much will she owe in penalties and interest on the late filing?
A)$ 49.
B)$490.
C)$588.
D)$637.
E) Nil.
Individual Instalments

Question

Quizplus · Accepted Answer

Ms. Deveco remitted a check for $10,000 on April 30, which covers her estimated net tax owing. Therefore, there is no late payment penalty. She filed her tax return one month late on May 31, but her actual net tax owing is lower than her estimated amount. This means that she will receive a refund of $200 ($10,000 - $9,800) from the government. Since she is entitled to a refund, there is no late-filing penalty or interest charges.

MsDeveco's 2011 Income Tax Return Is Due on April 30