After filing, IRS assessed a penalty for a bounced check. Now, what should I change in my 2024 Turbotax file so it correctly feeds into 2025 TT file?

[JerryChicago]

After filing my 2024 taxes, IRS sent me letter. They assessed a $65 penalty as one of my 2024 ACH payments bounced. As a result they reduced the amount of 2024 refund applied to my 2025 estimated taxes by $65.

I want my 2024 TT data to correctly feed into 2025 TT. Thinking to create a copy of SUBMITTED file and call the new one CORRECTED - where the CORRECTED file reflects reality and can then feed into 2025.  I'm NOT going to file an amended return. Where best to reflect changes? I'd rather not have any Overridden fields.

[SteamTrain · Accepted solution]

@JerryChicago 

I'm not sure how you would fudge your 2024 tax file to indicate that change.

BUT, if it was me

I'd just transfer in my existing 2024 file into 2025.

Then, on the Deductions&Credits page, down in the Estimated Taxes section, in that submenu, there is a specific line for the prior year's Federal Refund Applied to 2025 taxes.  You'd just enter that menu item and change the $$ amount to what was actually issued/applied to 2025 taxes.

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On my desktop software, the "Estimates and Other Taxes Paid" section had the selection as "Other Income Taxes" ....going in there the line item was for "2024 refund applied to 2025 federal taxes"

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You might need to explain more as to your actual filing sequence where you both pay the IRS and also expect to get a refund.....though, I guess it could happen with a larger than needed extension payment.

[VolvoGirl · Accepted solution]

First of all.....did you make up that bounced payment?   Otherwise more would have changed on your 2024 return besides just the penalty.   Did you use the Desktop program?  One thing you could do is open the 2024 program and save a copy of your original return.  Then make the changes in the copy ( don't amend it).  Then you will have a correct 2024 file to transfer into 2025.  

But if the 2024 refund changed the amount applied to 2025 just fix that in the 2025 return.

To enter or delete a Federal or State Refund from last year that you applied to this year, go to

Federal (or Personal for Home & Business)

Deductions and Credits

Then scroll way down to Estimates and Other Income Taxes Paid

Other Income Taxes - Click the Start or Revisit

Next page scroll down to 2024 Refund Applied to 2025

Click Start or Update by the tax you applied.