I feel silly... Tax goof.

[14Accent]

My boss is very good about getting our W-2's to us quickly, as is U.S. Bank about getting me my mortgage statements for year-end. I have used Credit Karma Tax the last 3 years without incident, and did the same this year. Here's what happened:

Credit Karma lets you file Federally before it's officially "open", so I punched in my info and submitted. The refund looked right to me, everything seemed fine. I have a VERY easy tax situation: one job, single, one property, no investments or other income. Return was processed, accepted, and refund issued from the feds.

At that time, Credit Karma was not accepting MN returns yet. No big deal, they're always delayed. I waited until filing was open, and re-submitted based on the information already entered plus a few state-specific questions. Much to my shock, it reported that I owed the state $4,100 in tax! I almost hit the floor in shock, all the while KNOWING that there was a mistake somewhere. I claim 0 dependents and over-pay every year (I know, I know, leave me be) so there's no WAY I owe the state a dime.

I begin frantically looking back through the process, trying to find out where I goofed, and then bam. I never filled out the state tax portion of my W-2 on the online form. Somehow I was able to not only continue with my return, but the fed's accepted it! I can't believe this didn't get flagged somewhere... how in the world could I report high 5-figures of income with absolutely no state tax paid? Or does the fed not look at things like that? Obviously, there are states with no income tax, but MN isn't one of them. Maybe I'm expecting more of the system than I should...

Anyways, I fixed my mistake, submitted my state return (which is now a $360 refund), and filled out form 1040-X which I will promptly mail to the IRS. I just hope I filled it out correctly... there was only a few adjustments to be made to AGI and such. In the end I'm due an additional $451 from them, so it's kind of a nice surprise. I just hope I don't get some random audit out of all of this. That's the last thing I need... no, wait. A $4k tax bill is the last thing I need.

/rant, lesson is: ALWAYS DOUBLE CHECK YOUR WORK, KIDS!

 

[ArrestMeRedZ]

The feds don't care if you had state tax withheld or not. Not their business or problem.

At the states request the feds provide tax information to states that charge income tax for each individual that provides the feds a return address in that state, whether or not the person is a resident of that state or owes it anything. I ran into this problem when in the military with the feds providing a non-resident state my personal tax info they had no right to access.

Glad you got it fixed. If I had to pay a state $4k in income tax, I'd move. Oh, wait, I did!

 

[Mr Nice]

I paid a little over $28K last year. ...–

 

[gathermewool]

Originally Posted by ArrestMeRedZ
The feds don't care if you had state tax withheld or not. Not their business or problem.

At the states request the feds provide tax information to states that charge income tax for each individual that provides the feds a return address in that state, whether or not the person is a resident of that state or owes it anything. I ran into this problem when in the military with the feds providing a non-resident state my personal tax info they had no right to access.

Glad you got it fixed. If I had to pay a state $4k in income tax, I'd move. Oh, wait, I did!


If someone legitimately has to pay $4k in taxes at the end of the year then good on them. I'd rather keep that money throughout the year than give a dime to the fed in advance. I've done my best to give as little to them as possible, but still end up with a small refund each year. For most of us, to owe $4k at the end of the year means you seriously screwed something up.

 

[PWMDMD]

Originally Posted by Mr Nice
I paid a little over $28K last year. ...–


I write a check for $30K to the feds and $5K MA every quarter! The last tax break gave a break to every business type except doctors, dentist, lawyers and accountants even though most of us are small business owners.

 

[14Accent]

I've heard stories like that... several of the "older generation" of people at the watering hole have told me stories about writing $25k checks to Uncle Sam at the end of the year....

Granted, I understand the mechanics behind it. Keep that money in the market or liquid or blah blah and budget for your estimated tax bill at year end. It's not like these guys are writing a $25k check out of thin air, it's planned for. But it still must hurt!

 

[Donald]

The IRS has few if any people to do audits.

 

[csandste]

If you owe them money it's harder for somebody to hack in and get a (not existent) refund. I like to owe a thou or so at the end of the year. I like Credit Karma as a site but had trouble with them on a rather complex return. Last gave em a look two years ago. Switched from TaxAct to FreeTax USA and love it. FTUSA would have charged you for that refile though along worth your state return. Can't beat free and if CK works for you that's great. CK might have shaken off their startup problems, but I'm too lazy to work on two returns to find out.

 

[Sayjac]

Quote
The feds don't care if you had state tax withheld or not. Not their business or problem.....
I believe that to be a true statement. State tax paid would only come into play as a deduction if one is itemizing anyway. As I read the OP, not the case here. And when itemizing for the Feds if paid state tax left out, reduces the deduction means an increased amount they keep. They don't mind that at all.

But yeah, double/triple checking before sending always a good thing to do.

 

[ARCOgraphite]

You think the feds would put e-files through a rough sieve to kick out major omissions.
Even on small fish.

But Maybe they like "catching you later" and hitting you with big penalties

Makes more money.

I though I made a booboo excluding non-massachusetts source income form my modest brokerage account
divs and gains on SCHED B.

But after sweating a couple night I re-red the non-resident form instruction s for the third time and decided I was

Good to NOT go to audit "jail"

The TAX ACT program didn't give me enough guidance here. I recall them being better in the past.

 

[alarmguy]

Originally Posted by Donald
The IRS has few if any people to do audits.


The IRS is not in charge of auditing state taxes. Its the individual states job to make sure you file your state income tax return and file it properly.

In most cases though, sooner or later, one year or another, the state would have picked up on it.
(ugh, I see many others posted on this already )

 

[JustinH]

Glad to live in a state tax free state.

 

[alarmguy]

Originally Posted by JustinH
Glad to live in a state tax free state.


God bless Texas however hopefully the migration there might ruin it.
We have state taxes here but at the same time, my property taxes are $3000 on our 3000 sq ft home and vehicles in one of the states best school districts.
Never mind the $2 a gallon gas (one of the lowest in the nation) and just about anything you buy, much cheaper/less taxes.
No vehicle inspections, (heck, I dont even have to regiter the boat trailer) no fees, truly the land of the free. (my same concerns about migration people voting for higher taxes) *L*

Property taxes about $10,000 LESS a year then when I was living in NY, on a home 1/3 rd the size. never mind the outrageous cost of fuel, vehicle inspections and just everything and anything they can get out of your wallet.

 

[eljefino]

I had to file a 1090x a few years ago-- didn't name my son on the childcare reimbursement form so the tax software didn't subtotal that page. Had another few hundred coming my way.

I did the 1090x manually and it was a pleasant (?) surprise. Wrote a paragraph essay on what I did wrong, and included only the return's pages that related to the error.

W2s are reconciled automatically at the IRS, I am sure your return was put on hold for eventual internal review. You'd probably just get an automated letter saying you did your math wrong, not a full-on audit.

 

[WagonWheel]

Originally Posted by Donald
The IRS has few if any people to do audits.


From what I've read, mostly they are looking for unusual deductions and things of the sort. Most of the "auditing " is done by computer checks now. For example, investment firms must report and track cost basis now, so you can't wash the actual cost basis anymore by transferring the asset.

 

[Spector]

if you do not itemize it should make no difference on the federal return!

 

[Yah-Tah-Hey]

Originally Posted by alarmguy

Glad to live in a state tax free state.


God bless Texas however hopefully the migration there might ruin it.
We have state taxes here but at the same time, my property taxes are $3000 on our 3000 sq ft home and vehicles in one of the states best school districts.
Never mind the $2 a gallon gas (one of the lowest in the nation) and just about anything you buy, much cheaper/less taxes.
No vehicle inspections, (heck, I dont even have to regiter the boat trailer) no fees, truly the land of the free. (my same concerns about migration people voting for higher taxes) *L*

Property taxes about $10,000 LESS a year then when I was living in NY, on a home 1/3 rd the size. never mind the outrageous cost of fuel, vehicle inspections and just everything and anything they can get out of your wallet.


I wish my property tax was $3,000.

 

[Hall]

Originally Posted by 14Accent
...and filled out form 1040-X which I will promptly mail to the IRS. I just hope I filled it out correctly... there was only a few adjustments to be made to AGI and such.

Why did you AGI change ? It shouldn't have.

 

[ARCOgraphite]

Originally Posted by JustinH
Glad to live in a state tax free state.



I do in NH, but wife commutes and works in Massachusetts , so i have to fill out a non-resident state form which is many many, MANY pages.

Arrghhh!

But tax free IDK about that. Maybe INCOME tax free.

I pay 6 grand on property taxes yearly on a little log cabin on a hill on 2 acres with major easements
then there is about - 400 bucks to register each + a form of "excise tax" or Road use.
Then there is 9 % meals tax at drive-throughs and restaurants

That adds up.

 

[Hall]

Originally Posted by ARCOgraphite
Originally Posted by JustinH
Glad to live in a state tax free state.

But tax free IDK about that. Maybe INCOME tax free.

Generally speaking, places with no income tax have higher property tax, sales tax, etc while places with income tax are lower on taxes with other things. People tend to brag about one of their tax "benefits" but ignore the other downsides (or don't reaiize they're out of the ordinary).