Amend the 2021 tax year in macOS downloaded TurboTax

[Mike1127]

I need to amend my 2021 taxes and I'm using the Mac downloaded program. Looking at the instructions I see that I'm supposed to go to some obvious section titled "amending your return" or some such, but when I open TT for 2021 I don't see any sign of an option to amend a return.

I want to briefly describe what happened. I received income from a settlement with a former employer over age discrimination. The settlement amount was roughly $13,000 and 6,500 was paid on a W2 and 6,500 was paid on a 1099-MISC.

Just recently I needed to send my 2021 1040 to Social Security disability and explain that neither the W2 nor the 1099-MISC represent for wages worked during the year, so I was printing it up, and I noticed that I can't find the 1099-MISC mentioned on the 1040, mentioned anywhere in form 1040 or other forms, other than the 1099-MISC itself which I'm positive I attached to the 1040 before sending it in. I went back to 2021 TT and hunted for any mention of income other than other types of income I already knew about, and the 1099-MISC and it's $6500 is nowhere.

So it's a bit weird that the IRS hasn't called me out on forgetting to mention the 1099-MISC, especially considering I'm almost 100% positive I sent it in the with the form.

I could just wait and see if I get away with it, but I would rather not invite more trouble down the line. I also REALLY don't want to get audited. I get paid partly (maybe 25% of my income) in cash and don't report that part of my income and I don't want the IRS digging into it.

Does the fact the IRS has never contacted me  mean that perhaps I DIDN'T make a mistake? It just seems odd.

Mike

[SantinoD]

The type of settlement you received is considered a taxable settlement and should have been included in your 2021 Tax Return.  If you reported the 1099-MISC correctly, Generally, the amount from Form 1099-MISC, Box 3 is reported as Other Income on Form 1040, Line 21.

I advise you to go back to your 2021 1040 and see if that amount is on Line 21 before you file an amendment.

[Mike1127]

Line 21 is blank. So I guess I didn't enter the 1099-MISC.

I also found another serious mistake. I noticed that TT choose itemized deductions. I have high medical expenses, about $10,000 that year. That's not enough to itemize over standard deduction, so I looked close and noticed it was using itemized deductions of about $19,000, including about $8000 of state tax paid. That didn't sound right and I discovered that I entered box 14 of my W2 wrong. It indicated $78.12 of CA SDI tax, and I entered $7,821.00 ! Yikes. So I'm going to owe quite a lot of extra tax.

How do I file an amended return on the download edition of Mac TT? I can't find anywhere it says "file an amended return" like the online instructions say. By the way, I didn't file electronically originally. I ran into an error so I filed by mail.

Also I'm going to need to make payments on this. I don't have thousands of dollars lying around like I will probably owe.

Thanks,

Mike

[Mike1127]

I found how to file 1040X by using the "search topics" button and searching for the word "amend."

I also looked online to learn about making a payment arrangement, and it said that using the online OPA system (online payment agreement) I would save money over filing that specific form they normally use for payment plans. But they won't know I owe tax (so does the OPA work?)  until I file the 1040X and I don't want to send in the 1040 X with no payment. I guess I'll just try to make the OPA work before they receive the 1040X. Any advice welcome.

Mike

[AmyC · Accepted solution]

The sooner you start making payments, the less you will pay in total interest. The IRS will accept your money before they process your return. You can choose your method at Payment plan options. A bank draft is the cheapest and easiest.

You can file the 1040x without adding a check. In fact, I would not enclose a check, just do the payment plan.

Make sure that you mail the amended form with tracking to ensure the safe arrival of your confidential information.

The IRS just finished processing all 2020 returns a month ago from the main year, unemployment changed to nontaxable for the first $10,200 and economic impact payments. Covid threw everything off, including the IRS.

[Mike1127]

Hi, Let me be sure I understand what you are saying. You are saying that if I wait for the IRS to process my amended 1040X before paying, I could be waiting so long that additional interest will accrue, right?

This topic didn't get a reply for a while so I did call the IRS. They told me the problem with a payment plan is that I won't know the total number I owe before they process the return (due to unknown interest and penalties for a $2000 difference in what I paid for 2021 and what I owe). They said to send in the largest down payment I can afford and then wait for a letter from the IRS to instruct me.

However, I believe that the interest rate is lower once you make the payment plan. And I don't see why it would do any harm to set up a payment plan with a slightly smaller number than the total amount due... I'm sure they have a way to revise it and will send me a letter instructing me what to do.

I like your solution best because the interest rate is lower on the payment plan. Oh, another problem with the payment plan is that there's no way to indicate what return you are paying on. Could be 2021 or 2022 for all they know. I don't know if that's a problem.

Thanks.