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I suddenly owe IRS a ton of money. I don't know why. It is as if my tax turn this year didn't work at all.

 
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6 Replies

I suddenly owe IRS a ton of money. I don't know why. It is as if my tax turn this year didn't work at all.

we really can't help you because we can't see your return or data nor the prior year's return. first, recheck everything. a misplaced decimal point, missing or extra digit can have a substantial effect. I don't know if live support is still available. that would be the next step.  after that, it would be using a tax pro. I would say this. if you believe that 2020 was much like 2019 where you didn't owe a ton of money, it's most likely you made some sort of entry error or answered a question incorrectly.

 

I suddenly owe IRS a ton of money. I don't know why. It is as if my tax turn this year didn't work at all.

I did have some invest gains in 2020 but I payed it before filing tax return using IRS direct pay in the form of "Estimated Tax". It is like IRS didn't get count those although I can see it IRS website's payment history. I am pretty sure I listed those payments in my filing.

I suddenly owe IRS a ton of money. I don't know why. It is as if my tax turn this year didn't work at all.

the way you phrased your original question it seemed as if you had not yet filed and Turbotax was showing you owed a lot of money.   now it seems that's incorrect. Your problem may be that since you indicated it as an estimated tax payment it would have been treated as a 2021 estimated tax payment and not a balance due 2020 payment.  if that's the case which seems likely, you'll need to contact the IRS to move the payment to 2020. even though you listed it on your 2020 return, the IRS would have ignored it unless you designated with Direct Pay that the payment was a balance due 

DIRECT PAY selections and entries should have been

balance due

income tax - form 1040

2020

 

 

have you checked your tax account transcript or record of account transcript to see if the payment posted to 2020 or 2021

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https://www.irs.gov/individuals/get-transcript 

 

if it was posted to the wrong year your options

1) call the IRS at 800-829-1040 - earlier this year because of IRS staffing shortages and an antiquated system many callers were not getting through

First choose your language.
Then 2
Then 1
Then 3
Then 2
When asked for SSN do nothing it will ask twice
Then 2
Then 4
You should then be transferred to an agent, but there is likely to be a long wait.

2) use the services of a tax pro - they have different facilities and means of contacting the IRS on your behalf. of course they will likely charge you for their services.

3) the IRS tax advocate service will not help you until other measures to resolve the payment issue have been exhausted

 

If you believe your IRS account doesn’t show one or more payments you’ve made, it’s best to start with a transcript of your account. Before contacting the IRS, first check with your financial institution to verify whether the check has cleared your bank account. You can also request a tax account transcript which will show all of the payments the IRS has received on your account.

If you notice that a payment you made hasn’t been applied to your account, you can contact the IRS toll-free line at 800-829-1040 to ask the IRS to look for your payment.

 

since you used direct pay the payment should appear on a bank statement. have it at hand when calling the IRS.

 

 

 

 

 

I suddenly owe IRS a ton of money. I don't know why. It is as if my tax turn this year didn't work at all.

Thank you for your reply. I have filed 2020 tax in May in which I payed an additional ~$7000 with the tax filing. I did owe IRS ~$400 and didn't notice it until recently. It is because I haven't checked my mail in a while due to international travels. In my mails, there are a bunch of notice from IRS telling me I am owing $400 dating back to June. Then one day in October, a mail came in saying I owe $100,000+ (I payed this amount in Feburary directly to IRS before filing as "estimated tax"). I am super surprised. Did IRS just revoke my entire tax return because I have owing $400 for too long?

I suddenly owe IRS a ton of money. I don't know why. It is as if my tax turn this year didn't work at all.

"Did IRS just revoke my entire tax return because I have owing $400 for too long?"

On this thought of mine, although it still possible, as you mentioned, I could filled in the wrong year for the estimated tax payment (I really think I didn't), I only feel strange because if I actually have been owing IRS $100,000 for this long, why didn't they notify me earlier like they did with the $400? Why did they wait until this month to tell me that?

I suddenly owe IRS a ton of money. I don't know why. It is as if my tax turn this year didn't work at all.

After a crunch, still ongoing, IRS resumed sending collection notices in August.

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