Gretchen's 2012 tax return, due April 15, 2013, was filed on July 15, 2013. Her tax due with the return was $1,200. Gretchen owes a late filing penalty of $180.

Question

Quizplus · Accepted Answer

According to the IRS, the late filing penalty for a tax return due on April 15, 2013, and filed on July 15, 2013, is 5% of the tax due per month, up to a maximum of 25%. Therefore, Gretchen's late filing penalty would be $60 per month (5% of $1,200) up to a maximum of $300 (25% of $1,200). Since her return was filed 3 months late, the penalty would be $180 (3 months x $60), which is consistent with the given information.

Gretchen's 2012 Tax Return, Due April 15, 2013, Was Filed