a. Geoffrey filed his tax return 2 months and 8 days late and had not requested

Question

a. Geoffrey filed his tax return 2 months and 8 days late and had not requested an extension of time for filing. Geoffrey's return indicated that he is to receive a $600 refund in taxes. Calculate the amount of Geoffrey's penalty for failure to file his tax return on time, assuming the failure to file was not fraudulent. b. John filed his individual income tax return 3 1/2 months after it was due. He had not requested an extension of time for filing. Along with his return, John remitted a check for $1,000, which was the balance of the taxes he owed with his return. Disregarding interest, calculate the total penalty that John will be required to pay, assuming the failure to file was not fraudulent (and that he is not subject to failure-to-pay penalties).

Explanation / Answer

a) The penalty on late filling of tax return is 5% of net tax due for each month or part of month for which the return is filed late. But if there is due of refund on the income tax return then there is no penalty even if the person files a late return.

In this case Geoffrey filed his tax return 2 months and 8 days late and had not requested an extension of time for filing. Geoffrey's return indicated that he is to receive a $600 refund in taxes. As there is a refund due to Geoffrey there will be no penalty for late filling.

b) In this case  John filed his individual income tax return 3 and 1/2 months after it was due. His tax due on the return is $1,000 . His penalty will be for four months of 5% of tax due (i.e. $1,000*5%*4 = $200).

Thus the total penalty John will be require to pay is $200.

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