If you put the wrong amount from first stimulus payment, do I need to change my federal taxes?

[Mfaherty1]

I need to know why my last two years of tax returns have been corrected by IRS AND REDUCED BY THOUSANFS IF DOLLARS WHEN CHECK, filed and paid for to Turbo tax??? and again this year the IRS had to correct my tax return all amounts entered were correct and I paid Turbo tax to check and file and agreed with Turbi tax it was correct and ready to file and and file yet they were in correct

[Vanessa A]

TurboTax cannot guarantee your entries are correct.  The guarantee is for the calculations and applying the current tax laws. 

When your return is adjusted, it is usually because of entry errors on your return.  This year, the stimulus was a big cause of these errors. You should receive a letter from the IRS telling you why your refund amount was changed.  The most common reasons so far this season are:

1. You did not enter that you received the stimulus payment in TurboTax, so your return said you were getting the money back, but the IRS caught it and said, no, you already received it.
   • If you look at line 30 of your 1040 and it shows an amount there, and you already received the $1,400 per person last year when they sent out the stimulus payments, this is likely the reason. 
   • If you do not remember getting the stimulus payments you can go back through your bank records to double check.  Many people either didn't realize they did receive it or they forgot, but end up seeing it when they go back through their records. 
   • The Recovery Rebate is ONLY for those who did not get the Third Stimulus Payment. 
2. You did not report the full amount of your Advanced Payments for the Child Tax Credit that you already received.  Again, the IRS will catch this and make the changes to your return. 
   • ​​​​​​​This would show on line 28 of your return. If you have 2 kids and you see $6,000 on line 28 then the IRS records show that you already received $3,000 in Advanced Child Tax Payments, but you entered that you did not receive any.  
   • Again, if you do not remember getting these payments you can go back through your bank records from July-December.

A couple other reasons include

1. You owed back taxes, child support, student loans or something else that caused your refund to be Offset to pay some of the past due debt. You should have received a letter if this was the case.
2. Something was not reported correctly on your return and the IRS recalculated your return causing you not to have a refund. This could include things such as missing income or inaccurately reported income (ex. you entered $5,500 for your W2 box 1 instead of $15,500)

You should look for a letter from the IRS and if you do not have one or do not receive one, you would need to call the IRS at 800-829-1040 as no one else would have the answer as to why your refund was reduced.

[xmasbaby0]

@Mfaherty1 No one else has access to your tax returns.  And TurboTax does not get any information from the IRS after you file your return, so no one at TT knows why the IRS reduced your refund.  When the IRS changes your refund they send you a letter several weeks after the change.  You say this happened for last year's return too--so what did your letter tell you last year?   Did you owe back taxes or child support that caused them to seize your refund?   Or did you make a mistake with the recovery rebate credit that you were supposed to enter information for?   If you made a mistake with that---they reduced your refund by the amount that was on line 30 of your Form 1040.

And...if your refund was reduced again for 2021----wait for your letter from the IRS.   TurboTax never knows about back tax or child support you may owe and cannot check for that when you prepare your return.   And TT also does not know if you received those stimulus checks---it is up to you to know and answer the questions about it correctly.   TT cannot check to see if you received stimulus checks--the software calculated based on your answers even if your answers were incorrect.

2021 tax returns have been especially confusing for people because of the new stuff people have had to answer questions about.   The recovery rebate credit and the child tax credit have caused all kinds of confusion for people.   Your problems for 2021 may be coming from the information on lines 28 or line 30, but until you get your letter from the IRS you will not know for sure.

You have not mentioned any specific amounts.  Sometimes we can make an educated guess as to the reason for your reduced refund if you mention specific amounts--for example if your refund was short by $1400 per person---it is likely to be a mix up regarding the 3rd EIP payment.   If it is short by $1800 or  $1500 or  a multiple of that amount  ---   maybe a mixup regarding the advance child tax credit payments.   Or---the fees you were supposed to pay for using TurboTax + the "refund processing fee" charged by the third party bank….

Did you choose to have TT fees deducted from your Federal refund?  (Remember that if you did that, you also agreed to an extra refund processing fee of $39.99 or $44.99 in CA)

How can I see my TurboTax  fees?   

https://ttlc.intuit.com/questions/2565973-how-do-i-review-my-fees-in-turbotax-online

What is Refund Processing Service?

The IRS will send you a letter that explains why your refund was reduced.   Meanwhile it might help you to check your online IRS account.

https://www.irs.gov/payments/your-online-account

https://blog.turbotax.intuit.com/tax-refunds/why-is-my-tax-refund-not-what-i-expected-49240/

[DoninGA]

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@Mfaherty1 wrote:

I need to know why my last two years of tax returns have been corrected by IRS AND REDUCED BY THOUSANFS IF DOLLARS WHEN CHECK, filed and paid for to Turbo tax??? and again this year the IRS had to correct my tax return all amounts entered were correct and I paid Turbo tax to check and file and agreed with Turbi tax it was correct and ready to file and and file yet they were in correct

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TurboTax or any other tax preparation software can never know when the user enters incorrect tax data, omit entering tax data or answers a question incorrectly.

This tax year the IRS is seeing tens of thousands of incorrect tax returns being filed because of the Recovery Rebate Credit and the advanced child tax credits sent in 2021.

Taxpayers are indicating that they did not receive the 3rd stimulus payment in the March - May 2021 timeframe when the IRS has records showing that the stimulus payment was sent to the taxpayer.  The IRS removes the Recovery Tax Credit on Line 30 of the tax return thereby reducing the tax refund or increasing the taxes owed.

Taxpayers are indicating they did not receive the advance child tax credit sent during the months of July thru December 2021.  The IRS has records showing that the advance child tax credit were sent to the taxpayer so they reduce the amount of the child tax credit on Line 28 of the tax return thereby reducing the tax refund or increasing the taxes owed.

Does the IRS website indicate that you were sent less than what was reported on your federal tax return Form 1040 Line 34? - https://www.irs.gov/refunds

If so, how much less?