Gerald Requests an Extension for Filing His Last Year's Individual

question 12

Multiple Choice

Gerald requests an extension for filing his last year's individual income tax return. His tax liability is $10,000, of which $8,000 was withheld, leaving a balance due of $2,000 when he files on August 1 of the current year. His penalty for failure to pay the tax on time is

• A)$0.
• B)$40.
• C)$300.
• D)$400.

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Definitions:

Monthly Salary Allowance

A fixed amount of money or compensations given on a monthly basis, often excluding any bonuses or additional pay.

Net Income

The total profit of a company after subtracting all expenses from revenues, also known as the bottom line.

Limited Life

The concept that an asset or an entity has a finite existence or operational period before it ceases to be useful or exist.

Corporation

A legal entity that is separate and distinct from its owners, providing them with limited liability, and is permitted to own assets, incur liabilities, and sell securities, among other rights.