The taxes shown on Kate's tax returns for 2012 and 2013 were $6,000 and $9,000, respectively. Kate's withholding tax for 2009 was $7,000 and she paid no estimated taxes. Kate filed her 2013 return on April 3, 2014, but she did not have sufficient funds to pay the balance due. She pays the $2,000 balance due on June 19, 2014. Kate's AGI for 2013 did not exceed $150,000. Calculate the penalties
Kate owes on her 2013 tax return.
What will be an ideal response?
Kate's 2013 AGI did not exceed $150,000. Therefore, she does not owe the penalty for underpaying estimated tax in 2013 because she paid an amount equal to her 2012 tax liability. She does not owe the failure-to-file penalty because she filed a timely return. She owes the failure-to-pay penalty for 15 months. The penalty is $150 (0.005 × $2,000 × 15).
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