Tax Amendment and Recovery Rebate Credit

[MesutA]

Greetings,

This year I tried to e-file for the first time 2021 taxes and I made the following mistake - Instead of filing two separate forms for 2020 and 2021 I put both years' W2s in 2021 form. A few days ago IRS direct deposited the whole sum to my account (federal only, state still processing). So shall I now amend and remove 2020 W2 form from the original e-file and what is going to happen ? They will ask me to return part of the money and then I will have to e-file 2020 to get back the money I will return ? Or is it okay if I just don't do 2020 since I got it already ? I am confused because I thought IRS would reject instead of paying me when they see both W2s (2020, 2021) in one form.
My other question is concerning the recovery rebate credit. I haven't received any stimulus checks paid in advance and I am eligible to claim the abovementioned credit however it wasn't direct deposited together with the tax refund and I am wondering if IRS will send it separately soon. I did point out that I haven't received any stimulus checks during the e-filing process and TurboTax asked me if I have received the recovery rebate credit and I said "no" and as far as I remember the request to get it was added to the form.

[fanfare]

@MesutA 

you'd best deposit that refund in some new savings account at a bank.

since IRS will be asking for the 2020 portion back.

how much you can recover after that depends on what your 2020 tax return says.

amount you owe? or refund?

There is no penalty to file 2020 tax return late if you are getting a refund.

[fanfare]

If it's not clear,

you have to amend your 2021 tax return to remove 2020 income.

If you just e-Filed, you can e-File your amendment.

You have to file a separate 2020 return with your 2020 income.

You'll have to file that on paper via US Mail.

There is no penalty to file 2020 tax return late if you are getting a refund.

[xmasbaby0]

The way to prepare and file your 2020 return:

Online preparation and e-filing for 2018 and 2019 and 2020 is permanently closed.

To file a return for a prior tax year

 If you need to prepare a return for 2018, 2019 or 2020 you can purchase and download desktop software to do it, then print, sign,  and mail the return(s)

https://turbotax.intuit.com/personal-taxes/past-years-products/

You may also want to explore purchasing the software from various retailers such as Amazon, Costco, Best Buy, Walmart, Sam’s, etc.

Remember to prepare your state return as well—if you live in a state that has a state income tax.

https://ttlc.intuit.com/community/state-taxes/help/how-do-i-contact-my-state-department-of-revenue/0... 

When you mail a tax return, you need to attach any documents showing tax withheld, such as your W-2’s or any 1099’s.  Use a mailing service that will track it, such as UPS or certified mail so you will know the IRS/state received the return.

Federal and state returns must be in separate envelopes and they are mailed to different addresses.  Read the mailing instructions that print with your tax return carefully so you mail them to the right addresses.

Note:  The desktop software you need to prepare the prior year return must be installed/downloaded to a full PC or Mac.  It cannot be used on a mobile device.

[MesutA]

Thanks for the replies! Yes, we are talking only about refunds. I don’t owe to IRS. So I have a couple of questions: 

1. Do I have to wait more to amend or I can do it now ? As I said I am waiting for the state taxes as well, I got only the federal return so far. If I e-file amend it will change the numbers for both federal and state taxes. 

2. Shall I file 2020 taxes simultaneously with the 2021 amendment or I have to wait to resolve 2021 and then file 2020 (since I put 2020 W2 form in e-file 2021 taxes)

3. Any thoughts about the Recovery Rebate Credit ? 

[VolvoGirl]

For #3, Recovery Rebate Credit.  If you didn't get the 3rd Stimulus (1400 per person) then it should be added on your 1040 line 30.  Is it there?  Then it is already included in the refund on line 35a.  It doesn't come separately.  

[xmasbaby0]

1. WAIT for the 2021 return to be fully processed and then you can amend federal and state.  You will have to remove any 2020 income from that incorrect return.

2.  Not sure what you mean by file them "simultaneously" --- your 2020 return has to be filed by mail.   It cannot be e-filed.    You may be able to e-file your amended  federal 2021 return, although it may be necessary to mail file the amended state return.

3.  You can seek the recovery rebate credit for the 1st and/or 2nd stimulus payment on a 2020 return.  The 1st stimulus payment was for $1200 per taxpayer and $500 for dependent children under the age of 17; the 2nd stimulus was $600 per taxpayer and $600 per dependent child under the age of 17.

You can only seek the 3rd stimulus payment-- the one for $1400 per person-- on a 2021 return as a recovery rebate credit.   If you already received the payment you must indicate that you received it when you are asked about it by the software.

[MesutA]

2. I mean can I file 2020 taxes and amend 2021 at the same time or I have to do them one by one since I put the 2020 W2 when e-filing 2021.

[VolvoGirl · Accepted solution]

#2.  Yes you can file 2020 and amend 2021 at the same time, but separately.   Each year is separate.  You will have to print and mail 2020.

To do a prior year return you have to buy the Desktop program here,
https://turbotax.intuit.com/personal-taxes/past-years-products
You will need a full Windows or Mac to install it on.

If you want to file for free you can fill out the forms by hand. Here are some basic forms…..

Here is the IRS 2020 Form 1040
https://www.irs.gov/pub/irs-prior/f1040--2020.pdf

or if you want bigger type use 1040SR for Seniors,
https://www.irs.gov/pub/irs-prior/f1040s--2020.pdf

And 2020 Instructions
https://www.irs.gov/pub/irs-prior/i1040gi--2020.pdf

2020 Tax and EIC Tables
https://www.irs.gov/pub/irs-prior/i1040tt--2020.pdf

Sch 1 : https://www.irs.gov/pub/irs-prior/f1040s1--2020.pdf
Sch 2 : https://www.irs.gov/pub/irs-prior/f1040s2--2020.pdf
Sch 3 : https://www.irs.gov/pub/irs-prior/f1040s3--2020.pdf

You have to print and mail prior year returns. When you mail a tax return, you need to attach any documents showing tax withheld, such as your W-2’s or any 1099’s. Use a mailing service that will track it, such as UPS or certified mail so you will know the IRS received the return. Don’t forget state.

Important! Mail Federal and State in separate envelopes and mail each year in separate envelopes.

[xmasbaby0 · Accepted solution]

Again----"same time" is meaningless.  Sure---do them the same week if you manage it---sending them at the same time is not relevant.     One    (2021 1040X) can be e-filed and one   (2020 1040) can only be filed by mail.   The amended 2021 return will likely take months to be processed.   It is currently taking the IRS about six months or more to process amended returns.   And your mailed 2020 return is going to take quite a long time as well.  Mailed returns take months to be processed.   Do not expect quick results from either one of those returns.   When you mail the 2020 return use a mailing service like certified mail so you will know it was received.  You will never see information about the 2020 return on the IRS refund site.  That site only shows information for 2021 returns.   

And when you send in the amended 2021 return you will need to watch for information here:

https://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1

[MesutA]

Yes, I didn’t get any of the three stimulus checks so I have claimed the recovery rebate credit and now I see that it is written in line 30 (1400 $ ) but I am pretty sure IRS didn’t add it to the refund. 

[MesutA]

Other than the RRC I understand now what to do and how to proceed. Thanks for all the replies and help. You rock guys!!

[VolvoGirl]

If the 1400 RRC for the stimulus is on line 30 then it is included in the refund on line 35a.  It doesn't come separately.  It either reduced a tax due or turned it into a refund or increased the refund.  

Start with the total tax you owe on line 24 and follow the math all the way down.  

[MesutA]

You are completely right! I got to the root of things. The confusion comes from my believe that I was absolutely sure I didn’t owe any taxes to the IRS, however, I see that if I have more than 12.550 income annually - it is taxable. Since I added both W2 forms (2020, 2021) the total amount exceeds 12.550 and otherwise (filing separately) it doesn’t, so I would get only refunds… Until now I thought IRS sent me more money than I deserve, but now I see that actually it is less 😁