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Oops! Forgot to report income in 2017 and 2018
Old 01-14-2020, 08:59 AM   #1
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Oops! Forgot to report income in 2017 and 2018

While starting to gather info for my tax returns, I just discovered that my returns for the last two years omitted about $1500 in dividends from XOM, where I have a DRIP account. Don't know how I missed that since I got 1099s and I did report XOM income in earlier years (so I assume Turbotax prompted me to include it).

I guess I need to file amended returns ASAP for both years and pay the interest and penalty. The forms look like quite a hassle. I wish I could just do a rough calculation, mail a check to the IRS and state, and let them figure the exact amount. Anyone else have experience with this?

Yuck.
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Old 01-14-2020, 09:05 AM   #2
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Turbotax should be able to help you file the amended return and also calculate the extra amount due. Since it was an unintentional mistake, try including a note explaining that fact, just pay the interest due, and hopefuly the IRS takes it as paid in full. Especially since you are self-reporting, the IRS may waive the penalty portion. You seem to have a good chance at this, it has worked for me in the past when I made a mistake. Just paid the interest and they accepted it.
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Old 01-14-2020, 09:12 AM   #3
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If you were in the 0% qualified dividends/long-term capital gains tax bracket in those years then you might not owe any additional tax... in which case you can just note it for your records and not sweat it.

Worst case, they will send you a bill if they think you owe them.
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Old 01-14-2020, 11:13 AM   #4
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The 1099-DIV went to the IRS from ExxonMobile and the IRS didn't send you a letter, so you're good. You might not have received a letter for 2018 yet, but they'd have sent you one for 2017 by now if they thought you owed them anything. I forgot some income once, and it was no big deal. The IRS sends you a bill and you pay it. ho-hum.
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Old 01-14-2020, 11:27 AM   #5
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I missed income one year. I just filed an amended return through TurboTax. Its actually pretty easy. Took me less than 20 minutes.
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Old 01-14-2020, 11:29 AM   #6
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I once forgot about interest on an I bond after I cashed it out. The IRS caught up with me 2 or 3 years later. Sent me a letter telling me to pay so much including interest. There was no penalty. I mailed in a check, and never heard from them again.

A few months later, received a letter from the state department of revenue asking me about this. The fed told them about my mistake. I sent the state a letter explaining that it was an interest from the US Treasury which was not taxed by the state. I then received a letter saying the matter was closed.
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Old 01-14-2020, 11:37 AM   #7
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Use tax software to compute the tax you owe. ( if you don't know how to do an x ) just add the missing income to the return . Compare the new balance to the old, and add 6% interest per year, Do the same for the state. Mail them a copy of the return as it should have looked like, you can print off a paper x if you want to.... The main thing is to pay ASAP, as the interest keeps computing. And they( especially the states ) are not timely about sending the letter with the additional interest owed. explain what happened in a cover letter, ie adding income of x due to taxpayer error. adding estimating interest owed of x, paying additional tax owed of x
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Old 01-14-2020, 12:06 PM   #8
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I'd at least take a shot at 1040-X before deciding it's a hassle. I've had to file some amended returns for various reasons, and I recall it being pretty straightforward and not that much work using TurboTax.
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Old 01-14-2020, 12:30 PM   #9
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Quote:
Originally Posted by RunningBum View Post
I'd at least take a shot at 1040-X before deciding it's a hassle. I've had to file some amended returns for various reasons, and I recall it being pretty straightforward and not that much work using TurboTax.


Agree that amended returns are very simple. Just make sure you provide an explanation of what was omitted. Makes it easier for them to find
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