Tax Filing - Early Bird Doesn't Get the Worm

[RunningBum]

Here's a good write up about Amended Tax Returns:

Filing an Amended Tax Return Using IRS Form 1040X

Following this, I think my situation would fall under the latter...
"You should not file an amended return if you are only correcting math errors as the IRS computers will check your math and correct any errors in calculation. Math errors are errors in adding or subtracting items on your tax return."

Another way to state it, as Wally from "Leave It To Beaver" might say "No sense getting all shook up over it Beav"

Really? If you're going to use that write up as a guide, your situation falls a lot more clearly under this statement, doesn't it?

"You can use an amended return to make corrections to your filing status, dependents, income, deductions, or tax credits. For example, if you need to report additional income from a W-2 that arrived after you filed your original return, you'll need to file an amendment. "

If it's a few dollars, I agree with the previous post that said let the IRS find it and bill you. If it's more than that, realize that you're going to be charged interest and a penalty, which I think is 20%.

It's up to you, but that's not a math error, that's additional income. An amended return really isn't that hard to do, especially since you can get it done before 4/15 and not deal with any interest or penalty.

Also, it depends on what the omission is. I somehow missed reporting a stock sale, and the IRS found it. The bill I got was for the entire proceeds, since they couldn't determine the basis and calculated it as 0, and a short term sale. So I had to fill out an amended return to declare the basis, because I would've owed thousands instead of less than $100.

I don't know if they caught my omission by a random check or if they check everyone's 1099s with schedule D. It became more of a pain because apparently once the computer kicked it out, someone did some manual calculations and swapped my basis and proceeds on a different transaction so it still didn't add up right unless you swapped that transaction. I called the 800 number on the form and actually talked the agent through each stock sale and 1099 to show that I was right, after adding the one omission. And even then it took a couple more letters and documentation to settle it, and they still didn't get it quite right, and I decided it was close enough and if they were fine with it, I was too.

If it's just dividends or interest, you won't go through so much.

 

[frayne]

While I understand that it may be easy for others to estimate their taxes, it has always been a very difficult thing for me. For example, my tax liability in 2011 was $35k and in 2012 was only $9k. While I knew my tax liability in 2012 would be lower, I didn't know exactly. And while $7k is a lot, I'd rather not pay the penalties, as that is not a good thing in my book.

Sometimes, it is much easier to look down your nose at people than to actually put into practice what you are advocating.

Not looking down at you by any stretch of the imagination, just wondered why you didn't or don't do quarterly estimated payments throughout the year. But again, I don't know what your vocation is or tax situation.

 

[easysurfer]

Really? If you're going to use that write up as a guide, your situation falls a lot more clearly under this statement, doesn't it?

"You can use an amended return to make corrections to your filing status, dependents, income, deductions, or tax credits. For example, if you need to report additional income from a W-2 that arrived after you filed your original return, you'll need to file an amendment. "

If it's a few dollars, I agree with the previous post that said let the IRS find it and bill you. If it's more than that, realize that you're going to be charged interest and a penalty, which I think is 20%.

It's up to you, but that's not a math error, that's additional income. An amended return really isn't that hard to do, especially since you can get it done before 4/15 and not deal with any interest or penalty.

Also, it depends on what the omission is. I somehow missed reporting a stock sale, and the IRS found it. The bill I got was for the entire proceeds, since they couldn't determine the basis and calculated it as 0, and a short term sale. So I had to fill out an amended return to declare the basis, because I would've owed thousands instead of less than $100.

I don't know if they caught my omission by a random check or if they check everyone's 1099s with schedule D. It became more of a pain because apparently once the computer kicked it out, someone did some manual calculations and swapped my basis and proceeds on a different transaction so it still didn't add up right unless you swapped that transaction. I called the 800 number on the form and actually talked the agent through each stock sale and 1099 to show that I was right, after adding the one omission. And even then it took a couple more letters and documentation to settle it, and they still didn't get it quite right, and I decided it was close enough and if they were fine with it, I was too.

If it's just dividends or interest, you won't go through so much.

I'll give some more specifics. The total amount of interest on the current 1099-OID is about $50. When I get the new one (not until later this month), I don't think the new amount would make any difference or not in the calculation (of whether I get any more refund or owe any more this year).

But even if it's only a couple bucks difference, say the new OID says $48 or $52, I wonder if that is worth doing the amended form or not. I still might as I like getting things correct down to the penny.

Thanks for the post.

 

[tryan]

TT has dropped in "updates" right up until the filing deadline ... still waiting for the MA state to finalize; so I never file early

 

[LOL!]

While I understand that it may be easy for others to estimate their taxes, it has always been a very difficult thing for me. For example, my tax liability in 2011 was $35k and in 2012 was only $9k. While I knew my tax liability in 2012 would be lower, I didn't know exactly. And while $7k is a lot, I'd rather not pay the penalties, as that is not a good thing in my book.

Sometimes, it is much easier to look down your nose at people than to actually put into practice what you are advocating.

There are many easy ways around this issue. Already mentioned are changing withholdings and making estimated tax payments. One doesn't need to file an estimated payment for every quarter and the estimated payment can still occur if one is withholding from a paycheck. There are advantages to withholding from a paycheck, too.

I change my paycheck withholding a few times a year after running the numbers in TurboTax. After year-end mutual fund and stock dividends are paid, I do a preliminary tax return as well.

If I have too little withheld, I make an estimate tax payment. If I have an expected refund coming, then I adjust my paycheck withholding in January to essentially $0 so that the refund appears in my paycheck. Then when I file my taxes in October, I just have the overpayment apply to the next tax year.

So-called "safe harbor" exceptions are easy to meet if one's income and tax liability have increased, but when one's income has decreased it is harder to underpay and thus a refund an easy thing to happen. With interests rates under 0.5%, it is not as much of an "interest-free loan" to the government as it used to be.

And $7K refund would not be a lot to me if income taxes were $100,000.

 

[jebmke]

I don't know if they caught my omission by a random check or if they check everyone's 1099s with schedule D.

The IRS will match the total sales value on Schedule D with the electronic 1099Bs they receive.

I process about 500 returns a year. I recommend to my preparers that they do a simple check of the Sched D totals to the 1099B totals - it avoids a lot of errors.

 

[audreyh1]

The IRS will match the total sales value on Schedule D with the electronic 1099Bs they receive.

I process about 500 returns a year. I recommend to my preparers that they do a simple check of the Sched D totals to the 1099B totals - it avoids a lot of errors.

Great tip!

And it's one of the checks I do by hand against my turbotax result.

 

[Exterous]

...Note to self... In future, waitl until March 1 to start taxes.

For the 2010 tax year there was a late change to how the IRS handled certain deductions. Unfortunately there was a bug in how their systems were updated that resulted in most (all?) forms claiming this deduction filed before a certain date in mid February being completely screwed up. We didn't get our refund until sometime in June or July and had to get Tax Advocate involved. Now I always wait until closer to the deadline to file

 

[timo2]

2013 might be different for the timing of filing taxes. According to Mark Steber, Chief Tax Officer, Jackson Hewitt Tax Service Inc., everyone should file before the March 1 sequestration. He paints a 'sky is falling' picture. Mark Steber: The IRS Sequestration: Why You Should Care, and What It Means
Here is an excerpt:

"An IRS furlough means the following for taxpayers:

• There will be even fewer IRS operators to take taxpayer calls and answer questions.
• The taxpayer assistance centers will operate with even fewer people and hours than currently during a time that is expected to be even busier than normal.
• If there are issues, even small ones, they will take much longer to address and get corrected with your return."

 

[easysurfer]

For the 2010 tax year there was a late change to how the IRS handled certain deductions. Unfortunately there was a bug in how their systems were updated that resulted in most (all?) forms claiming this deduction filed before a certain date in mid February being completely screwed up. We didn't get our refund until sometime in June or July and had to get Tax Advocate involved. Now I always wait until closer to the deadline to file

In the future my signal of when to file might not be the superbowl but opening day of baseball.

 

[NW-Bound]

Tax Filing - Early Bird Doesn't Get the Worm

No, the early bird still gets the worm.

However, it's the second mouse that gets the cheese.

 

[arky]

I tried something new this year, I used the "freefilefillableforms" link from the Internal Revenue Service site. You fill in forms just like you would manually and it does the math for you. E-Filed on Feb 1 and got my refund on Feb 9. Pretty slick and free !!. Assuming nothing bad comes back to haunt me for doing this, I will use this method next year.

 

[audreyh1]

2013 might be different for the timing of filing taxes. According to Mark Steber, Chief Tax Officer, Jackson Hewitt Tax Service Inc., everyone should file before the March 1 sequestration. He paints a 'sky is falling' picture. Mark Steber: The IRS Sequestration: Why You Should Care, and What It Means
Here is an excerpt:

"An IRS furlough means the following for taxpayers:

• There will be even fewer IRS operators to take taxpayer calls and answer questions.
• The taxpayer assistance centers will operate with even fewer people and hours than currently during a time that is expected to be even busier than normal.
• If there are issues, even small ones, they will take much longer to address and get corrected with your return."

Oh, yeah, and

As I've said in the past for all of the "this year is a complex year" reasons, this is not a year to go it alone at tax time. You should use a paid preparer to help navigate the murky confusing world of taxes, and soon, before possible IRS and other government sequestrations occur.

In other words, taxes are just too hard for the "little people" to do on their own.

If I were expecting a refund, I would perhaps hurry up. But since I'm paying and it's all electronic, I'm not worried. So what if it takes them months to process my return.

Besides, we don't have any idea what will really happen with the sequestration.

 

[foxfirev5]

I tried something new this year, I used the "freefilefillableforms" link from the Internal Revenue Service site. You fill in forms just like you would manually and it does the math for you. E-Filed on Feb 1 and got my refund on Feb 9. Pretty slick and free !!. Assuming nothing bad comes back to haunt me for doing this, I will use this method next year.

I'm a first time user myself. Filed on 1/31 went on vacation and the relatively small refund was in the bank when I returned on 2/8.

 

[easysurfer]

Well, I definitely will be file amended returns this year. Not only did I receive a corrected 1099-OID, but also a 1099-B which I had not received when I filed earlier.

The problem child is me investing in peer-to-peer lending, namely, The Lending Club. Which brings another question on the proper way to input 1099-OID info in Turbotax.

On the statement, that shows the individual note number and then the Box 1 amounts (some only a few cents as in Lending Club, $25 loans are the minimum).

For recording purposes of the 1099-OID, is it right to just put in the Payer and total amount (in this case, Lending Club, and say $45)? Or is it correct to input each note? (in this case, about 50 notes total, which should sum up up to the $45).

 

[Texas Proud]

Well, I definitely will be file amended returns this year. Not only did I receive a corrected 1099-OID, but also a 1099-B which I had not received when I filed earlier.

The problem child is me investing in peer-to-peer lending, namely, The Lending Club. Which brings another question on the proper way to input 1099-OID info in Turbotax.

On the statement, that shows the individual note number and then the Box 1 amounts (some only a few cents as in Lending Club, $25 loans are the minimum).

For recording purposes of the 1099-OID, is it right to just put in the Payer and total amount (in this case, Lending Club, and say $45)? Or is it correct to input each note? (in this case, about 50 notes total, which should sum up up to the $45).

Who is listed as the payor If Lending Club, then put it all in one...

If there are multiple payor numbers (ie, the SS of every loan)... I do not know... but I would just put down "multiple payors thru Lending Club" and put down the $45...

 

[easysurfer]

Yes, Lending Club is listed as the payer. As for the individual note, only a note number and my account number on the description.

I'm satisfied with just listing Lending Club and the summary like you suggested.

As I was thinking, no way would I list each note as for me, that's doable as I only have about 50 notes (I'm not adding any more into Lending Club and look forward to when all the notes matue), but I can imagine someone who invests a lot would have thousands of notes. Just common sense, no way would those folks be expected to list all of them, I'd think.

 

[JoeWras]

After a few years of amended 1099s leading to my amending my tax form, I simply do the work in turbotax when I get around to it, and then press the button after April 1.

It is just a hassle to do the amendment.

"1099" has become a dirty word in my vocabulary.

 

[easysurfer]

So, I went ahead and mailed off my 1040 amended return at the friendly local post office.

A couple of things I noticed. First, the post office sure has cut down and what used to be three open windows only had one person working. Second, Delivery Confirmation is replaced with USPS Tracking and is included automatically with Priority Mail (no more slips to fill out).

 

[W2R]

So, I went ahead and mailed off my 1040 amended return at the friendly local post office.

A couple of things I noticed. First, the post office sure has cut down and what used to be three open windows only had one person working. Second, Delivery Confirmation is replaced with USPS Tracking and is included automatically with Priority Mail (no more slips to fill out).

My local post office has become so undependable that I don't feel comfortable mailing something as important as a tax return any more. I mailed my property taxes in early December. After a month the check still hadn't cleared, so I ended up having to pay to cancel the check. Then I paid online, plus a late fee, in mid January.

I think this is just a local problem, though, and I imagine you should be fine. Besides, with an amended return you don't really have any choice.

Anyway, I e-filed last night, and I will be getting a whole $80 refund. I'll try not to spend it all in one place!

 

[marko]

This is weird. Using TT, I usually enter info as becomes available.

I did NOT do any updates but when I went to enter new info today, it seemed that my return was slightly higher.

I could've sworn my return-to-date was X but when I opened the file today (and yes, before entering any info) it was X+$30.

Is this possible or just having a "senior moment"?

 

[W2R]

This is weird. Using TT, I usually enter info as becomes available.

I did NOT do any updates but when I went to enter new info today, it seemed that my return was slightly higher.

I could've sworn my return-to-date was X but when I opened the file today (and yes, before entering any info) it was X+$30.

Is this possible or just having a "senior moment"?

If you told it to do automatic updates, could it have done a minor update without asking first? I don't recall.

Usually I do the manual updates, but this year for some reason I told it to do automatic updates. I am a little nervous that it could change things after the fact like that. However, since I began using TT (only about 6-7 years ago) the IRS has accepted all my returns without even a peep so it is hard to worry much about it.

 

[Original Wally]

Anyway, I e-filed last night, and I will be getting a whole $80 refund. I'll try not to spend it all in one place!

Way to stoak the economy!

 

[Original Wally]

Anyone know when the Vanguard REIT (VGSLX) 1099 will get issued? Last piece of info then... Click.

(for 2009 I had an unusually large refund due to the withholding on a lot of vacation pay on the books @ retirement. That year, I went ahead and filed w/out a final piece to get the refund started. Then did the amended once the final piece came in and sent them a small check snail mail. Worked. )

 

[timo2]

IRS furloughs would begin this summer

IRS furloughs would begin this summer -- FederalDaily.com

I feel better now, as I just filed my taxes