Gretchen's 2011 tax return, due April 15, 2012, was filed on July 15, 2012. Her tax due with the return was $1,200. Gretchen owes a late filing penalty of $180.

Question

Quizplus · Accepted Answer

The late filing penalty for individual taxpayers who owe taxes is generally 5% of the unpaid tax liability for each month or part of a month that the return is late, up to a maximum of 25%. Since Gretchen filed her return three months late, she owes a penalty of 15% of her tax liability ($1,200 x 0.15 = $180). Therefore, the statement is true.

Gretchen's 2011 Tax Return, Due April 15, 2012, Was Filed