Tax Self-Prep Question

[Amethyst]

A CPA prepared my 2021 taxes last year, the year my husband died.

He estimated how much I should withhold in 2022, based on 2021's investment income and my expected (reduced) ordinary income. In addition, I was due a good-sized 2021 refund, which I indicated should be applied to 2022's tax liability. The CPA didn't indicate that I needed to pay estimated taxes, nor provide 1099-EST forms.

This year, I'm doing my own taxes with HRB Deluxe. It seems that I am due a good-sized refund. In addition, the software asked how much of last year's refund I applied to my estimated tax. Well, I didn't pay any estimated taxes. I just did regular withholding from my monthly pension.

I think this all means "I am entitled to my whole 2021 refund, which I didn't take in 2022," but the two refunds add up to such a large number that it worries me. Am I overthinking/overworrying?

 

[audreyh1]

Sounds like you did pay some 2022 estimated taxes - you paid your 2021 refund.

Your CPA must have figured out that your withholding would cover your 2022 liability so he didn’t prepare additional EST forms. Seems like he should have told you to take your 2021 refund instead of applying it.

So sounds like two refunds to me.

 

[COcheesehead]

So you applied ‘21’s refund to ‘22 and now you are due a refund for ‘22? If that is correct, you over withheld. I would also review your taxes to see if you can reduce the refund, if any for ‘23.

 

[Amethyst]

Yes, my only concern was that I didn't actually "send" the 2021 refund to the IRS. But I guess I really did - in the form of withholding.

CPA or not, I always try to overwithhold, since one never knows what end-of-year distros will be. For me, 2022's EOY's were much less than 2021's.

So you applied ‘21’s refund to ‘22 and now you are due a refund for ‘22? If that is correct, you over withheld. I would also review your taxes to see if you can reduce the refund, if any for ‘23.

 

[qwerty3656]

Yes, my only concern was that I didn't actually "send" the 2021 refund to the IRS

The IRS owed you money in 2021 - you told them to "keep it" and apply to 2022. So you did "send" them the money by not taking the refund.

 

[pb4uski]

A CPA prepared my 2021 taxes last year, the year my husband died.

He estimated how much I should withhold in 2022, based on 2021's investment income and my expected (reduced) ordinary income. In addition, I was due a good-sized 2021 refund, which I indicated should be applied to 2022's tax liability. The CPA didn't indicate that I needed to pay estimated taxes, nor provide 1099-EST forms.

This year, I'm doing my own taxes with HRB Deluxe. It seems that I am due a good-sized refund. In addition, the software asked how much of last year's refund I applied to my estimated tax. Well, I didn't pay any estimated taxes. I just did regular withholding from my monthly pension.

I think this all means "I am entitled to my whole 2021 refund, which I didn't take in 2022," but the two refunds add up to such a large number that it worries me. Am I overthinking/overworrying?

You should input the amount shown on your 2021 Form 1040, line 36 as the amount of 2021 refund that you applied to your 2022 estimated tax... it should then show up on line 26 of your 2022 Form 1040.

Your total taxes paid for the year on line 32 should be the sum of what you applied to 2022 on your 2021 return plus the total of your 2022 withholdings on line 25 of your 2022 Form 1040.

 

[Amethyst]

Thanks!

You should input the amount shown on your 2021 Form 1040, line 36 as the amount of 2021 refund that you applied to your 2022 estimated tax... it should then show up on line 26 of your 2022 Form 1040.

Your total taxes paid for the year on line 32 should be the sum of what you applied to 2022 on your 2021 return plus the total of your 2022 withholdings on line 25 of your 2022 Form 1040.

 

[target2019]

On your 2021 tax form, on line 36, you'll see the amount applied to 2022.

36 Amount of line 34 you want applied to your 2022 estimated tax

In your tax software you'll make sure that amount gets entered during the interview questions for taxes you paid for 2022 tax year.

 

[Jerry1]

Just make sure you’re not double counting somehow and you’ll be fine.