Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Example 3-7 Ned Fromton, an employer, files his employment tax return 20 days after the due date of the return. The amount of tax
Example 3-7 Ned Fromton, an employer, files his employment tax return 20 days after the due date of the return. The amount of tax that was unpaid is $6,000. Fromton's penalty is: Failure to file (5% x $6,000) = $300 Note: Any fraction of a month counts as a whole month. Example 3-8 Yeld Company failed to pay its employment taxes of $5,000 for March 20-- (due April 15) until May 20. The failure to pay penalty assessed against Yeld Company is: Failure to Pay Tax ($5,000 x 0.5% 2) Interest on Taxes Due ($5,000 x 0.06 x 35/365) Total Penalty $50.00 28.77 $78.77 Note: In addition, a penalty for failure to make a timely deposit will also be assessed. Vulcan Company is a monthly depositor whose tax liability for March 20-- is $2,015. 1. What is the due date for the deposit of these taxes? 2. Assume that no deposit was made until April 29 (14 days late). Compute the following penalties. Assume a 365-day year in your computations. Round your answers to the nearest cent. a. Penalty for failure to make timely deposit. b. Penalty for failure to fully pay tax. Interest on taxes due and unpaid (assume a 6% interest rate). d. Total penalty imposed.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started