Tax return question.

[Caster]

Me and the wife (no kids) do a 1040EZ every year. Well our return was direct deposited this morning. It's nearly double of what it is supposed to be. Now, the IRS says if it's right, we can expect a letter confirming it in a couple of weeks. If not, we're to call this number and talk to someone. In the meantime, we're not to spend it or withdraw it or whatever.

What the [filth] kind stupid [insert more vulgarity] is this? No wonder this country is headed for financial ruin at mach 10. Ohh, let's just pass out money like condoms at the free clinic. Maybe I shouldn't look a gift horse in the mouth you say? No, no. You know as well as I do. The dope dealer is always happy to give somebody a hit for free.....if it'll get you hooked.

Anyway [/rant]

Has this ever happened to any of you? Please discuss.

[Guest Lester Weevils]

Being part time self-employed since 1967 and full time self-employed since 1977, I have never, ever, in 43 years received a refund. The money ALWAYS goes the other direction. If I accidentally over-pay a thousand or two, I let em keep the money til next year when I'll probably owe some extra.

It is your own money in the refund of course and it is silly to have to wait a couple of weeks before you can spend it because of IRS incompetence. But at least you didn't have to send em a check for a few thousand. It would be a lot more fun to wait on a refund than write a big check.

[Caster]

That's true, but I doubt I'll ever send them a check. I have been working since I was 15 and I have always claimed zero and filed on a 1040. I COULD keep more money through out the year, but I am used to this way and I could decide to never fill out my taxes again and they'd probably never do anything about it. They always owe me money back. It's always kept me out of trouble and I don't pay it any attention after nearly 20 years.

[Reservoir Dog]

Something similar happened to my father back in the 1990's. He paid his taxes, then go a letter saying that he overpaid. The IRS sent him a check for that amount....so he kept it. About 2 years later, he got a notice from the IRS that he had underpaid his taxes for that same year by the exact amount that the IRS had refunded him. They wanted the money back, plus interest and penalties. It was crazy. After a few weeks of butting heads with the IRS, they waived the interest and penalties, and my dad sent them a check for the money he knew he owed in the first place.

[Guest Sprowse]

Something similar happened to my father back in the 1990's. He paid his taxes, then go a letter saying that he overpaid. The IRS sent him a check for that amount....so he kept it. About 2 years later, he got a notice from the IRS that he had underpaid his taxes for that same year by the exact amount that the IRS had refunded him. They wanted the money back, plus interest and penalties. It was crazy. After a few weeks of butting heads with the IRS, they waived the interest and penalties, and my dad sent them a check for the money he knew he owed in the first place.

I've heard several stories just like this. Keep copies of ALL correspondence with the IRS, for at least 7 years.

[greenego]

On Fed. 14, 15 the IRS computers blow up. There were so many returns filed those days that IRS computers were overwhelm. There was a delay in filing some returns because of late year tax law changes A lot of refunds are being delayed because of this. Yours being doubled is a new one. If you are sure your refund amount is correct, I would go ahead and use that money and wait to hear from IRS about the rest.

[Caster]

On Fed. 14, 15 the IRS computers blow up. There were so many returns filed those days that IRS computers were overwhelm. There was a delay in filing some returns because of late year tax law changes A lot of refunds are being delayed because of this. Yours being doubled is a new one. If you are sure your refund amount is correct, I would go ahead and use that money and wait to hear from IRS about the rest.

Well a 1040 EZ with (1) W-2 form is easy enough to figure and dang hard to get wrong. It's less than grade school math. I go to the library every year and get two sets of 1040ez paper and books. I fill out one as does my wife. Then we compare each others. If they're the same, we send her copy in (better handwriting:D) We came to the same figure of X. Our refund was (X)2 + about $20. It was actually a little over double.

I'm not wealthy BY ANY MEANS!!! But my bills are paid and I don't owe anything. I won't be spending the money until I have ink on paper saying it's mine. I don't want to have to cough $$$ later that I may or may not have.

[greenego]

Well a 1040 EZ with (1) W-2 form is easy enough to figure and dang hard to get wrong. It's less than grade school math. I go to the library every year and get two sets of 1040ez paper and books. I fill out one as does my wife. Then we compare each others. If they're the same, we send her copy in (better handwriting:D) We came to the same figure of X. Our refund was (X)2 + about $20. It was actually a little over double.

I'm not wealthy BY ANY MEANS!!! But my bills are paid and I don't owe anything. I won't be spending the money until I have ink on paper saying it's mine. I don't want to have to cough $$$ later that I may or may not have.

I am guessing you do not qualify for EITC. Did you include the make work pay credit? When it comes to taxes nothing is as easy as it looks. Good Luck.

[DRM]

If I accidentally over-pay a thousand or two, I let em keep the money til next year when I'll probably owe some extra.

I have no clue why anyone would want to let the government keep YOUR money for an entire year, earning interest on it, and you not having use of it for a year...

[Caster]

Got off the phone with them last night. They say everything looks correct. They said [again] a letter will be mailed out explaining why. Why they couldn't elaborate on the phone I don't understand. Whatever. I'll take the $$$

What we thought were getting gets tucked away for hard time/emergency the other half is looking like either the beginning of my next AR build or [and more likely] going to the local training school for advanced handgun and tactical rifle & shotgun courses.

The fed aren't real bright but hey, I'll remember this instance fondly WTSHTF.

[Guest Lester Weevils]

I have no clue why anyone would want to let the government keep YOUR money for an entire year, earning interest on it, and you not having use of it for a year...

Hi DRM

Self-Employed, there are income variations year to year. I don't have time to do enough accounting to do mid-course corrections in the year to adjust the estimated tax payments.

I always calc the tax a few days before April 15. Because I never get a refund, there is no need to do it sooner, and it isn't a pleasant task which is easily procrastinated.

On years when I finish the return about 2 am on April 15 and notice I over-paid, the scenario typically looks like I need to send Uncle Sugar a first quarter estimated tax payment of $6000, and Uncle Sugar owes me $2000. How in the world does it make sense to get Uncle Sugar to send me a check for $2000 when I have to turn around on the same day and send them 3X as much? Not to mention the other three estimated tax payments to come in the year?

[DRM]

On years when I finish the return about 2 am on April 15 and notice I over-paid, the scenario typically looks like I need to send Uncle Sugar a first quarter estimated tax payment of $6000, and Uncle Sugar owes me $2000. How in the world does it make sense to get Uncle Sugar to send me a check for $2000 when I have to turn around on the same day and send them 3X as much? Not to mention the other three estimated tax payments to come in the year?

My bad - not sure what I was thinking this morning. Iin the instance of filing estimated quarterly taxes it makes perfect sense to apply the refund against the upcoming quarterly payments. Carry on!

[mikegideon]

I have no clue why anyone would want to let the government keep YOUR money for an entire year, earning interest on it, and you not having use of it for a year...

That's the way I've always looked at it. I have had some pretty painful payouts because of it. This year will be no exception.

[Guest Lester Weevils]

I love being self-employed and would rather not have to be an employee. Ain't complaining about the situation. Just reporting.

Because I never know exactly what expenses and income will be each year, it is difficult to estimate how much to send for quarterly payments. A better money manager could probably do it more precisely. I just send whatever TurboTax tells me to send for the next year.

With my modest income, slight changes in income or expenses seem to make extreme differences in the tax bill. If one year the income is slightly low and the expenses slightly high, the tax bill has a surprisingly large drop. On years where the expenses are slightly low and the income slightly high, the extra amount due at the end of the year can be surprisingly scary. The tax bill swings more drastically than one would expect with minor variations of income and expenses.

[gregintenn]

Did you include the make work pay credit?

This was my first thought. Was it an $800 difference per chance?