An unexpected 1099 just dropped in

[upset264]

Last week I prepared my daughters 2021 income taxes. As per usual I let it sit for a few days while I made sure everything was accounted for and ready to go. Yesterday morning I hit the "send" button and shortly thereafter received an email from the IRS that the return was accepted.

Within the hour I got a text form my daughter that she had received another 1099 form. This was from the IRS for $15 in interest paid in 2021. Totally unexpected.

The only thing I can think of is that they might have paid interest on the delayed refund caused when they retroactively made the unemployment she received in 2020 tax free.

Anyway, question is, should I prepare an amended return or wait for the IRS to send her a letter that they have amended her return and she owes them $1.50?

 

[pb4uski]

.... Anyway, question is, should I prepare an amended return or wait for the IRS to send her a letter that they have amended her return and she owes them $1.50?

That is what I would do.... only because the amounts involved are so de minimis.

 

[COcheesehead]

I am paranoid about underreporting any income, but in this case it’s pretty small so I agree with pb4uski.

Quick note though on something that happened to me. My state Colorado disallowed a deduction on my 2018 state return. They supposedly sent me a letter, but we moved in that time frame and I never got it. Long story short they finally notified me again in January. I owed the amount in question from the disallowed deduction, interest and a penalty for almost $4500 total. I found out that all my state tax correspondence is now online under my tax account, I check it monthly. No more tax surprises for me.

 

[Time2]

One year in late February, I went to my accountant and got my taxes completed. I drove home which is all of 6 blocks, open the mailbox and I found an amended 1099 from Vanguard. I called my accountant and said don't E-file that yet, the already did. So he did an amended return, gave it to me and said don't send it for 6 weeks. He said, that will give them time to process what we sent, if you send it now it could get looked at first and really complicate things. Never heard any more about it.

 

[cathy63]

Last week I prepared my daughters 2021 income taxes. As per usual I let it sit for a few days while I made sure everything was accounted for and ready to go. Yesterday morning I hit the "send" button and shortly thereafter received an email from the IRS that the return was accepted.

Within the hour I got a text form my daughter that she had received another 1099 form. This was from the IRS for $15 in interest paid in 2021. Totally unexpected.

The only thing I can think of is that they might have paid interest on the delayed refund caused when they retroactively made the unemployment she received in 2020 tax free.

Anyway, question is, should I prepare an amended return or wait for the IRS to send her a letter that they have amended her return and she owes them $1.50?

For the returns I work on as a Tax-Aide volunteer, our policy is that we don't do an amended return for $200 or less of missed income. We tell the taxpayer to wait for a letter from the IRS. (This is a policy set by our state leadership team, not an IRS requirement, but I believe the IRS knows about it and has not told them we should have a different policy.)

I have also seen some info that says if the due date for the return has not passed, you can file another original return with the correct info rather than doing an amended return. I don't see how you'd be able to e-file a second return with the same SSN though -- the second one should be rejected -- so you'd have to mail it.

 

[RetiredHappy]

It costs nothing to submit an amended return and it gives peace of mind. If it were me, I would submit an amended return. In addition, we are still in tax submission period, no penalty for going over the deadline.

 

[grasshopper]

I started an amended return with TurboTax, and got a pop up that 1040-X form wasn't available as of yesterday. YMMV

 

[SecondCor521]

I have also seen some info that says if the due date for the return has not passed, you can file another original return with the correct info rather than doing an amended return. I don't see how you'd be able to e-file a second return with the same SSN though -- the second one should be rejected -- so you'd have to mail it.

The IRS explicitly says somewhere not to submit more than one original return per tax year per SSN, for reasons that I'm sure you can imagine. I just read that the other day somewhere on irs.gov; I think it may have been in the 1040-X instructions.

I've also seen guidance to wait until the original return is processed before submitting an amended return.

 

[Montecfo]

I would wait. Just not worth the ambiguity and trouble for such small dollars.

Sometimes I have later found a mistake like a missed deduction on my return. Let's say it would net $100-200 if I amended. I just put a note in my file to consider it if I get audited or have another reason to amend.

Usually never happens but I dislike drawing attention to return for small dollars.

 

[Sunset]

This is why I don't file for a few weeks after getting my last info, so filing is generally end of Feb for me.
Doesn't eliminate the possibility, but reduces the odds.

Last year I did some relatives returns in March, even though they had the 1099s by mid-January.

 

[cathy63]

The IRS explicitly says somewhere not to submit more than one original return per tax year per SSN, for reasons that I'm sure you can imagine. I just read that the other day somewhere on irs.gov; I think it may have been in the 1040-X instructions.

I've also seen guidance to wait until the original return is processed before submitting an amended return.

OK, you made me go look for it. Here's the Taxpayer Advocate's Blog about Superseding Returns and how they work.

https://www.taxpayeradvocate.irs.go...-500-stimulus-benefit-for-certain-non-filers/

 

[SecondCor521]

OK, you made me go look for it. Here's the Taxpayer Advocate's Blog about Superseding Returns and how they work.

https://www.taxpayeradvocate.irs.go...-500-stimulus-benefit-for-certain-non-filers/

OK, you made me go look for it. Here's the IRS verbiage I found in the instructions for Form 1040-X:

"Don’t file more than one original return for the same year, even if you haven’t received your refund or haven’t heard from the IRS since you filed. Filing more than one original return for the same year, or sending in more than one copy of the same return (unless we ask you to do so), could delay your refund."

-- https://www.irs.gov/pub/irs-pdf/i1040x.pdf page 3 column 1

(I'm not familiar with superceding returns, but the only stuff I found on it on irs.gov seemed to related to business returns.)

 

[CaptTom]

I once got notified that I'd missed a small amount of income on a tax return three years prior. There was the small amount I owed, plus three years' worth of interest (back when it was double-digit.)

I fired off a check almost immediately.

I got back another bill for less than $2 for the interest that had accrued between the time they sent the notice, and the time they got the check.

I fired off another check. But I intentionally shorted them $0.01.

I'm still waiting for the bill for that penny, plus interest. I think I figured I'd be over 100 years old by the time it added up to a dollar.

 

[cathy63]

OK, you made me go look for it. Here's the IRS verbiage I found in the instructions for Form 1040-X:

"Don’t file more than one original return for the same year, even if you haven’t received your refund or haven’t heard from the IRS since you filed. Filing more than one original return for the same year, or sending in more than one copy of the same return (unless we ask you to do so), could delay your refund."

-- https://www.irs.gov/pub/irs-pdf/i1040x.pdf page 3 column 1

(I'm not familiar with superceding returns, but the only stuff I found on it on irs.gov seemed to related to business returns.)

Well, there you go. Two different parts of the IRS giving opposite recommendations.

 

[RetiredHappy]

Filing an amended return is not the same as filing identical original returns.

 

[SecondCor521]

Well, there you go. Two different parts of the IRS giving opposite recommendations.

I'm shocked, shocked I tell you!

Filing an amended return is not the same as filing identical original returns.

Yep, I'm aware. The quote was from the amended return instructions but if you read it carefully you will note that it talks about not filing two original returns.

 

[kgtest]

I had this same exact scenario happen a few years ago. I never amended and never received any further communication. Bigger fish to fry, limited resources. Remember it probably costs the IRS more to process a letter for your mistake, then what the income would bring in for your mistake. I wouldn't bother.