I'm so over this situation, I could just scream! Some of you may remember the following scenario: M left his employer (switched companies) in 2011. He received a bonus early on in 2011. Apparently, it wasn't a bonus, it was an advance that was mis-categorized. So, in mid-2012, we got notice that we needed to pay it back. It was $14K. We scrambled, & paid the employer back. Then, we had to refile our 2011 taxes. Oh, what a treat that was. I used Turbo Tax (the original source of my 2011 taxes) to update, and we received a $5K refund, as our re-stated income was lower.
I've been receiving notices from the IRS since early December that they audited this income reduction. At first, it was because M's employer hadn't submitted the revised W2 to the IRS. We had to track that down, which took about 10 hours of phone calls, & letter writing, & dealing with certified mail.
We received yet another notice from the IRS last week, and it turns out that, even though our income went down by $14K, we weren't really due a $5K refund, because that reduction in our income adjusted our overall tax rate, and we were now required to pay the AMT. And, we got penalties & fees on top of that, even though the IRS accepted our original revision, and provided us with a prompt refund. Their error. So, I now owe $5,250 back to the IRS. On top of a large amount owed for our 2013 taxes. We were relatively prepared for the 2013 taxes, but this? So frustrating!
This is like a bomb that won't stop exploding.
Ahhhhhhh, happy Monday. ;-) At least my team won the Super Bowl? Although, that was a shameful show by the Broncos. Go, Seahawks!! :-)
Oh, what a headache! Sorry you're going through that!!!
ReplyDeleteAt least you aren't a member of the Broncos... I'm pretty sure they all have a huge headache this morning! (I feel bad for them though, they could have at least got 2 or 3 more touchdowns so it wouldn't be so shameful)
Is there any recourse with TurboTax? They should have calculated the AMT correctly. Sorry you're dealing with this huge PITA.
ReplyDeleteOuch, ouch ouch. That reminds me my first time doing taxes on my own... I had to pay $2k and some (which is about 2.5 checks worth, or a month's work of pay!). It was very frustrating, so I feel for you... I hope you can figure it out. Have you considered hiring a tax person? Since it was their fault the first time, I don't see why you have to pay penalties on it!
ReplyDeleteYikes, that is horrible! I’m sorry to hear that you had to go through that situation. Computing and filing your own tax is stressful enough, let alone dealing with the IRS’s errors. Anyway, I hope you don’t encounter this unfortunate incident again. Take care!
ReplyDeleteShelby Heffner @ Cash Manager