=awns salar!7 (/,///Allocable share o" partnership income 718/,/// x /.(/ ',///Kuali"ied di#idends 7(,/// G 7),/// ,/// ;et lon&term capital ain R7'8,/// & 71',/// x /.(/ *,(//Adusted ross income A4$71'5,(//arer o" itemiDed deductions or standard deduction%Standard deduction71','// 1','//$temiDed deductions%:ortae interest7*,///Leal estate taxes 1,8//Charitable contributions 71,*// G 71,/// ',*// 1/,(//-ersonal and dependenc! exemptions 7),9// x ( 15,*//Taxable income7 9,*//$ncome tax liabilit! "rom tax rate schedules7 15,588Q$ncome tax pa!ments made durin the !ear%Tax withheld "rom salar!7 *,///@stimated tax pa!ments 1',/// 18,///Le"und7 ',(1'Q79,*// O ,/// G *,(// N 8(,'//2 tax71',9/8 =i#idends and TC4% 71),(// x /.15 ',/1/ Total tax liabilit!71(,918 pp. $%1&1 throuh $%1&19.

I:1-46

Since -auls return is "iled late and the "inal balance due on the return is paid late both dueon or be"ore April 15, '/1), -aul is subect to "urther interest and penalties on his '/1' incometax return. 3oth interest and penalties are computed on the net tax due or, in this case, 75,(*)7)',**1 minus 7',198. The interest and penalties are computed as "ollows assumin a )+interest rate on underpa!ments on tax and the return is ')/ da!s late%$nterest%75,(*) x )+ x ')/M)** N 71/'.99.There are two penalties to which -aul would be subect, a "ailure to "ile timel! penalt!and a "ailure to pa! the tax timel! penalt!. The late pa!ment penalt! is .5+ per month to amaximum o" '5+2 the late "ilin penalt! is 5+ per month to a maximum o" '5+. Bowe#er, both penalties are not assessed toether. $" both penalties appl!, the "ailure to "ile penalt! is reduced b!.5+.?ailure&to&pa! penalt! /.5+ per month to a maximum '5+% 3ased on "ilin the return 8 months late%Tax due 75,(*).//esser o" a /.5+ V 8 or b '5+ V (+ ?ailure&to&pa! penalt! 7