Fixing a dumb U.S. tax mistake
March 2, 2024 3:26 PM Subscribe
I filed my 2023 taxes with the free online H&R Block as usual. It calculated a $2 return for federal and no balance for PA. The returns were sent electronically and quickly accepted. Unfortunately I later realized I had never uploaded any of my 1099 forms; I must have missed the prompt. Is there any reason why I shouldn't go ahead and file federal & state amendments?
Dad recommended waiting until I get the $2 refund, but I don't see anything on the IRS website that indicates I should wait.
Dad recommended waiting until I get the $2 refund, but I don't see anything on the IRS website that indicates I should wait.
Response by poster: Typo correction: $2 refund.
Yes I did W2 for salary. In previous years I was definitely prompted to report investment income. I'm pretty sure I just clicked past the prompt by accident.
posted by gray17 at 5:10 PM on March 2, 2024 [1 favorite]
Yes I did W2 for salary. In previous years I was definitely prompted to report investment income. I'm pretty sure I just clicked past the prompt by accident.
posted by gray17 at 5:10 PM on March 2, 2024 [1 favorite]
You do need to include 1099 income, so did you include the income but just not upload the forms? Or are you saying you did not include the income either?
posted by soelo at 5:12 PM on March 2, 2024
posted by soelo at 5:12 PM on March 2, 2024
Best answer: You will need to amend your return and this page suggests you wait until your return is processed. Dad is right, according to that page.
posted by soelo at 5:25 PM on March 2, 2024 [6 favorites]
posted by soelo at 5:25 PM on March 2, 2024 [6 favorites]
Best answer: It's distinctly possible the IRS will notice the error and correct your taxes for you. If that happens, you'll get a CP22 form telling you how much you need to pay. Of course, if that doesn't happen, you should amend your taxes.
posted by saeculorum at 6:37 PM on March 2, 2024 [3 favorites]
posted by saeculorum at 6:37 PM on March 2, 2024 [3 favorites]
I would file an amendment. There are different penalties for fraud vs. mistakes. I wouldn't raise questions about which this was. This wasn't "transposing two digits," and you have a track record of filing 1099s before so it's clear you know to do so. Being off by $2 won't matter because it's under $10. Alternatively you could call them if you don't value your time. That said, you could wait and see if they flag it and just pay then. I'm not sure how high the risk is that they'll assume this was intentional -- others might know; this worry might be a pessimistic assumption on my part. But for me personally, the risk of creating a little confusion around this $2 would feel worth it to demonstrate that it was a good faith mistake.
posted by slidell at 9:27 PM on March 2, 2024 [1 favorite]
posted by slidell at 9:27 PM on March 2, 2024 [1 favorite]
If I am tracking correctly, this is not a $2 error. OP is saying that they have a type of income - investment income - that they did not report at all. So, they owe some (unknown to us) amount of tax on that income that they have not paid. This is a simple call - just amend and pay it at the right time.
posted by Mid at 5:35 AM on March 3, 2024 [1 favorite]
posted by Mid at 5:35 AM on March 3, 2024 [1 favorite]
File an amendment right away and include a cheque for the amount due, plus two dollars. Include a letter explaining the mistake. Everything will sort out. With the IRS you always want to be in the position of them owing you money, rather than you owing them.
posted by seanmpuckett at 7:02 AM on March 3, 2024
posted by seanmpuckett at 7:02 AM on March 3, 2024
You could also give the IRS a call. Thanks to the inflation reduction act, they have hired thousands of additional call center agents, and wait times have dropped dramatically. I think you can also set it up so they call you back.
posted by rockindata at 7:16 AM on March 3, 2024
posted by rockindata at 7:16 AM on March 3, 2024
I don't think there is a reason to call them. This is a very standard reason for people to file an amendment, forgetting to report income. It doesn't really matter if it was an oversight or a problem with the interface as long as you correct it. Also, an amendment would include the original refund amount in the calculation, so there is no need to include an extra two dollars in the amount you send them.
posted by soelo at 7:39 AM on March 3, 2024 [1 favorite]
posted by soelo at 7:39 AM on March 3, 2024 [1 favorite]
The risk with filing an amended return (Form 1040X) too quickly is that the original return (Form 1040) needs to be processed before any amendments are received, as the link supplied by soelo indicates. Otherwise there can be delays and confusion with respect to getting everything sorted out properly. It’s happened to me and it’s a situation you’ll want to avoid. This is an instance where it’s best to wait. saeculorum is also correct that it’s likely a CP22 will be generated, and that can replace the need for you to even file the Form 1040X. Long story short, your dad is right.
posted by cheapskatebay at 10:26 AM on March 3, 2024
posted by cheapskatebay at 10:26 AM on March 3, 2024
Best answer: I receive dozens and dozens of 1099s every year, and every single year at least one (usually more) person sends it to me after the tax deadline. Or I forget/lose one. Or a client never filed one. Or it ended up in my spam folder if it was electronic. Or whatever. These same people are also supposed to send a copy to the IRS. There are a lot of failure points in the 1099 reporting system.
If the IRS notices/cares about the discrepancy, they send you the CP22 form and you just write them a check and it's done. This is a completely ordinary thing they do and no big deal.
If I do not receive a CP22 after filing and I know I have a 1099 or three to amend, I just make a note to do that the following tax year or next tax appointment, whichever comes first. Unless this is an extremely large amount of money relative to your income it's not really worth worrying about with any kind of urgency.
As noted by cheapskatebay I would be wary of immediately filing an amendment because honestly the way the IRS handles this stuff is dumb and slow and it's best to just let the process play out for stuff like this.
Some posters here are jumping straight to omg/fraud which if that were the case, everyone in America would be in jail right now.
TLDR: just listen to your dad.
posted by bradbane at 1:41 PM on March 3, 2024 [2 favorites]
If the IRS notices/cares about the discrepancy, they send you the CP22 form and you just write them a check and it's done. This is a completely ordinary thing they do and no big deal.
If I do not receive a CP22 after filing and I know I have a 1099 or three to amend, I just make a note to do that the following tax year or next tax appointment, whichever comes first. Unless this is an extremely large amount of money relative to your income it's not really worth worrying about with any kind of urgency.
As noted by cheapskatebay I would be wary of immediately filing an amendment because honestly the way the IRS handles this stuff is dumb and slow and it's best to just let the process play out for stuff like this.
Some posters here are jumping straight to omg/fraud which if that were the case, everyone in America would be in jail right now.
TLDR: just listen to your dad.
posted by bradbane at 1:41 PM on March 3, 2024 [2 favorites]
The place where you can get into trouble is if you didn't withhold enough money to cover the amount that you are going to owe once you include the extra income. I would calculate the amended return now and see how much extra you are gong to owe
I know that you can make estimated payments without having file the return (for example if you get an extension until October). You can also look up what the penalty for underpayment would be. If the amount is significant to you, I would until April 15th and then consider either filing an amended return or making an additional payment for 2023 to avoid the extra costs. On the other hand, if the fees and penalties are less than the headache of of dealing with possible complications of things getting lost or mismatched by the IRS, then you could consider waiting until you get your refund and then filiing the amendment.
Note: when I say "trouble", it is most likely just letter from IRS asking for immediately payment plus penalties and interest. The letter is polite and business like and if you send in the payment promptly everything is fine. The letter might come if you do nothing and they catch the mismatch. It will also come if you file the amendment but don't include the extra you owe for paying late.
posted by metahawk at 7:06 PM on March 3, 2024
I know that you can make estimated payments without having file the return (for example if you get an extension until October). You can also look up what the penalty for underpayment would be. If the amount is significant to you, I would until April 15th and then consider either filing an amended return or making an additional payment for 2023 to avoid the extra costs. On the other hand, if the fees and penalties are less than the headache of of dealing with possible complications of things getting lost or mismatched by the IRS, then you could consider waiting until you get your refund and then filiing the amendment.
Note: when I say "trouble", it is most likely just letter from IRS asking for immediately payment plus penalties and interest. The letter is polite and business like and if you send in the payment promptly everything is fine. The letter might come if you do nothing and they catch the mismatch. It will also come if you file the amendment but don't include the extra you owe for paying late.
posted by metahawk at 7:06 PM on March 3, 2024
Penalties generally don't kick in until you owe $1,000 or more. The last day to make an estimated payment for 2023 taxes was January 15th. If you get an extension, you still end up paying late fees if you have not paid enough by April 15th. The extension is for filing and not for paying.
posted by soelo at 8:46 PM on March 3, 2024
posted by soelo at 8:46 PM on March 3, 2024
Here to confirm:
* No need to panic
* You need to be current on your estimated payments (if applicable) and fully paid for your 2023 balance by 4/15/24, or else you're in line for penalties no matter what your returns say on that date. So you'll want to amend by then.
* ...but it's no big deal if it's a small amount of money, this is shockingly routine
* Listen to dad
posted by brianvan at 6:10 AM on March 4, 2024
* No need to panic
* You need to be current on your estimated payments (if applicable) and fully paid for your 2023 balance by 4/15/24, or else you're in line for penalties no matter what your returns say on that date. So you'll want to amend by then.
* ...but it's no big deal if it's a small amount of money, this is shockingly routine
* Listen to dad
posted by brianvan at 6:10 AM on March 4, 2024
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posted by toodleydoodley at 4:42 PM on March 2, 2024 [1 favorite]