IRS Bill

[m_s_k]

I have a weird situation. During most of 2019 I was laid off and on unemployment since Feb. 2019. In light of that, I have signed up for healthcare coverage through healcare.gov (Obamacare) to have insurance for myself and my dependents. After submitting my taxes for 2019 I have included form 8962 with my return based on the 1095-A provided by Health Insurance Marketplace. Few days ago, I have received a statement/bill from IRS in the amount of $17,535.08, stating that I have miscalculations on my 1040 and also stating that my household income is greater than 400% of the poverty line, making me not eligible. After revisiting my 2019 tax return, I have realized that I did not claim my daughter as a dependent, as a result of that IRS says my 8962 form is incorrect. The bill for $17,000 is due on 4/21/2021. Can I amend/correct my 2019 1040 return and to avoid paying the bill? 

[npierson7]

Yes, you can amend your 2019 tax return to include your dependent. It will change the entire return calculation and most likely your eligibility for the Premium Credits, and your tax bill won't be that big. 

If you used TurboTax Online, simply log in to your account and select “Amend a return that was filed and accepted.” If you used our CD/download product, sign back into your return and select “Amend a filed return.” You must file a separate Form 1040X for each tax return you are amending.

[m_s_k]

Thank you so much for your response. on e more question: What about the fact that the bill is due on 4/21/2021? do I need to respond - Agree (and pay) or disagree to call the given tell # [phone number removed] x569. The problem is, that number is no longer taking calls. Catch 22 :( What should i do to avoid further penalties? I am sure amended 1040 will take time to process (i will submit it asap)

[Mike9241]

if your daughter is a covered dependent her Modified Adjusted Gross Income would go on line 2b. adding a  dependent will increase the federal poverty line but it may also increase family income so it is unknown how household income as a % of the poverty line will be affected.  do an amended return but be sure to include her MAGI on line 2b (usually her regular AGI + tax-exempt interest - assuming she filed a 2019 tax return). then see what the revised 8962 shows. if it shows less than what the IRS is asking, send in the amended return signed and dated with a copy of the notice a letter of explanation (you added your daughter to your return and her MAGI of $xxxx to form 8962 line 2b resulting in ........ to the address on the notice and any payment due. the IRS will bill for penalties and interest.

if you are still over 400% send the IRS the money or make payment arrangements. 

[BillM223]

The bill you refer to is the bill for penalties and interest from 2017 and 2018?

Reply by letter to their request (which probably invited you to disagree as you said, giving you the chance to ask for the abatement) as soon as possible. Then send the reply by certified or registered mail or by UPS or FedEx (if you have a street address for that office), so that you can demonstrate later that you replied in plenty of time once that office starts to dig itself out and tries to figure out who answered and who didn't.

Please add a note in your letter that you tried to reply by phone as directed in the letter, but that the phone number was no longer accepting calls (they will probably know that, but it's good to remind them that you have been trying to abide by their request).

So you have not mailed the 2017 and 2018 state returns yet? Hmmmn, what you might do is in your response, ask them if they would like you to send the state returns (with the federal copies, of course) to their office. They will probably say, "no", but give them the chance.

And mail your 2017 and 2018 returns anyway, again by certified or registered post, or by UPS or FedEx.

As for the due date to pay, generally (I haven't seen your letter), the due date is to pay or respond...and you are doing your best to respond.

[m_s_k]

Thanks for your response. One more question - can I amend my return claiming my daughter as a dependent for my 2019 tax return. She was 24 yrs old at the time, full time student,  making $6,600.00 gross part time, while being in school. She lived at home with me and I have supported all year.