UPDATE: THIS question has been answered. PLEASE NO MORE replies. I can not find a way to CLOSE this thread or just delete the question.....
Thank you to all that did answer.
Anthony
I didn't receive my 2nd stimulus check in 2020, so when I prepared my 2020 taxes, TurboTax applied a 1,200 credit to my taxes.
Now IRS sent a letter saying, we found a miscalculation that affects the following area: Recovery Rebate Credit.
I was supposed to get a refund for about $1,000 and now IRS claims I have an amount due of $1,053.61
I did receive the 2nd stimulus check on January 18, 2021. I did not think I would have to include that since I deposited the money in 2021.
Suggestions?
Anthony
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The first 2 stimulus checks were being reconciled on the 2020 return and the third one will be reconciled on the 2021 return. If you had gotten them then you had to enter them both ... the screen told you just that. Failure to enter the correct amount you got in advance will be corrected by the IRS and the return is recalculated without that credit which means you could either get less of a refund or actually owe so they bill you.
You were supposed to enter the second stimulus payment in your 2020 tax return, even though you received it in January 2021. So it appears that you claimed a credit that you were not entitled to, and the IRS letter is correct. You probably have to pay the amount that they say you owe.
But eliminating a $1,200 credit should not make a difference of $2,000. On the Form 1040 that you filed, is the amount on line 30 $1,200, or is it more than that? Does the letter say that anything else was wrong, or that they changed anything else? They are probably adding penalties and interest. The details should be in the letter. But I would not expect the penalties and interest to amount to $800.
OK so I had to pull some money out of my IRA because I didn't have enough money to pay my bills and had to pay taxes and fee on that IRA amount... I think I received the money in 2021, it should go into the 2021 taxes
I had to pull some money out of my IRA because I didn't have enough money to pay my bills and had to pay taxes and fees on that IRA amount... I think since I received the stimulus check in 2021, it should go into the 2021 taxes
Check with the IRA custodian if you don't know which tax year the distribution will be reported on.
sorry.. not sure what is IRA custodian and how to get to it...
BTW.. here the issue is not about the IRA amount .. it is about the second stimulus check that I received in 2021 (not in 2020) and IRS is asking to include in the 2020 taxes
Didn't the prior answers clear it up? You WERE suppose to enter the 2nd amount even if you got it in 2021. It was an advance on your 2020 return. It came in Dec - Feb 2021. On your tax return 1040 line 30 you tried to get it again so the IRS took it off because they already sent it to you. Sorry, it should not have been on line 30.
The second stimulus check was supposed to be included in 2020, even though you received it in 2021. Read the earlier replies above. The IRS is right.
The IRA custodian is the bank, brokerage, or other financial institution that holds the IRA funds and manages your IRA account.
It doesn't matter when you received the money from the IRA. What matters is when it was distributed from the IRA. If you took it out late in the year, it could have been distributed in December but you didn't get it until January. (Or you could be mistaken about when you got it. You said "I think I received the money in 2021.")
If the IRA custodian reported the distribution in 2020, it has to go on your 2020 tax return. If you got a 2020 Form 1099-R for it, it goes on your 2020 tax return.
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