1040X Amend payment

[MG_214]

Hello Turbo Tax experts,

I had 2 W2s. The second one came in later. It is from the same company but since they changed their name so that is why I got 2 W2s. When I amend my 2nd W2 it showed that I owe an amount to the IRS so I created an Account with them but I did not see any outstanding amount as of yet. What If I decide to pay it later are there going to be penalties, if yes then how much would be the penalty, and how it would affect me?

Thanks!

[JBedford]

Hi, @MG_214 ! If I understand correctly, you amended your return to add the second W-2, is that right? When did you do that? Did you e-file the amendment, or mail it in? These are all factors in determining why your account is not yet showing a balance due. 

As to paying the balance, my advice is to do so as soon as you possibly can. The IRS is the last creditor that you want to have. 🙂 But if you are genuinely unable to pay the balance, then you can request a payment plan with the IRS. Penalties and interest generally apply on all late tax payments. The Failure to Pay Penalty is generally 0.5% per month, and I believe the current interest rate is 7% per year. Hope this helps! 

[MG_214]

Hello @JBedford Thanks for responding to my post! Yes, I add the 2nd W2. I did that on the 14th or 15th of April this year for 2022. I remember reading it on their website that it might take up to 16 weeks to show up a balance is that true? And I am planning to pay the amount owe on my credit card and yes I would like to use a payment plan if that is feasible. However, I do not know of any deadlines. So can I use the direct pay website to pay online or do I use the 1040X website to pay? Not sure which one accepts credit card

[JBedford]

Yes, it can take up to 16 weeks for an amendment to be processed. The deadline for tax payments is always "tax day", which was April 18 this year. To pay using a a credit card, you have to use one of the IRS' third-party processors. Hope this helps! 

[MG_214]

Thank you for providing the link. Since I will be using my credit card. How fast this payment would reflect my 1040x? and will it show up on my IRS account?

[JBedford]

The payment should be credited on the date that it's made, though it may take a few days to "show up". And yes, it should be reflected on your IRS Online Account. 

[MG_214]

Appreciate all the help, thanks! @JBedford 

[MelodyB · Accepted solution]

Depending on when you filed your amended return it takes 16 weeks to process an amended return.  If you have unpaid taxes you will receive a penalty for failing to pay the correct amount of tax by the due date.  From the IRS website, here is how the penalty is calculated.

Failure to Pay Amount Shown as Tax on Your Return

If you don’t pay the amount shown as tax you owe on your return, we calculate the Failure to Pay Penalty in this way:

• The Failure to Pay Penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid. The penalty won’t exceed 25% of your unpaid taxes.
• If both a Failure to Pay and a Failure to File Penalty are applied in the same month, the Failure to File Penalty will be reduced by the amount of the Failure to Pay Penalty applied in that month. For example, instead of a 5% Failure to File Penalty for the month, we would apply a 4.5% Failure to File Penalty and a 0.5% Failure to Pay Penalty.
• If you filed your tax return on time as an individual and you have an approved payment plan, the Failure to Pay Penalty is reduced to 0.25% per month (or partial month) during your approved payment plan.
• If you don’t pay your tax in 10 days after getting a notice from us with our intent to levy, the Failure to Pay Penalty is 1% per month or partial month.
• We apply full monthly charges, even if you pay your tax in full before the month ends.

Failure to Pay Tax You Didn’t Report on Your Return

If you owe tax that you didn’t report on your return or paid on time, we calculate the Failure to Pay penalty in this way:

• If we find that you owe tax you didn’t report on your return, we’ll send you a notice or letter with the amount due and a due date to pay.  Due dates are generally 21 calendar days after we send the notice or 10 business days after we send the notice if the tax amount you owe is $100,000 or more.
• If you don’t pay your tax by the due date in the notice or letter we send to you, the Failure to Pay Penalty is 0.5% of the tax you didn’t pay timely for each month or partial month that you don’t pay after the due date.
• If you filed your tax return on time as an individual and you have an approved payment plan, the Failure to Pay Penalty is reduced to 0.25% per month (or partial month) during your approved payment plan.
• If you don’t pay your tax in 10 days after getting a notice from us with our intent to levy, the Failure to Pay Penalty is 1% per month or partial month.
• We apply full monthly charges, even if you pay your tax in full before the month ends.

[MG_214]

Thank you for the Information. I appreciate the time you took to explain all. I filed my W2 and Amended my second W2 since they were both from the same company (my company now has a new name). Now I owe them an amount which I will pay very soon.