Ms. Deveco's 2020 income tax return is due on April 30, 2021. While she is too busy to file her tax return on that date, she remits a cheque to the government for $10,000, her estimated 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, 2021. At this time, the return shows that her actual net tax owing was $9,800. Assuming that the interest rate applicable to late payment of taxes is one-half percent per month without daily compounding, how much will she owe in penalties and interest on the late filing?
A)$ 49.
B)$490.
C)$588.
D)$637.
E)Nil.

Question

Quizplus · Accepted Answer

Since Ms. Deveco paid her estimated taxes by the due date, she will not owe any penalties or interest for late payment of taxes. The fact that she overpaid her taxes and filed her return late does not incur penalties or interest because her actual tax liability was covered by her payment on the due date.

Ms Deveco's 2020 Income Tax Return Is Due on April