IRS sent me letter stating that our AGI was $10 more than what qualified income was for Stimulus Rebate...and requested payment back for the $2800 (Stimulas payments)plus penalties. Turbo Tax apparently calculate incorrectly and showed our AGI as 150,010..$10 over to claim stimulus payment. IRS said that Turbo tax shouldn't have allowed the Stimulus since our AGI was over $150,000 by $10. I amended my AGI by lowering it below the $150,000 with a business deduction only and now it shows that we owe more taxes? I only entered a business deduction of $225 that we failed to enter, nothing else, which lowered the AGI under the $150,000 but it shows that we now owe an additional $ 988? Why would this be?
So frustrating. The AMENDED calculated 2021 taxes increased on the LOWER AGI ..when only a $225 deduction was entered. Could this be another Turbo Tax error?
Should I go have my taxes amended by a professional? Why would my taxes increase for adding a business deduction of $225 only?
I did review your taxes and you do not need to amend your returns either way. The threshold was not $150,000 for eliminating the credit, only reducing it. Your percentage of reduction was 0.1% which calculates to $3 (rounded). This is the most they can be asking for as payback if you were entitled to take the credit on your tax return. If you checked your account via the link I provided and confirmed the IRS does not show you received the 3rd stimulus payment (2021 payments were the 3rd payment), you need to respond to the letter that you correctly claimed the credit on your tax return. The letter has a section about if you disagree and wish to respond. You need to compile the proof of information and respond according to that guidance.
If the issue is that you actually did not receive the 2nd stimulus payment (made in late 2020), you need to amend your 2020 tax return and can see Recovery Rebate Credit for more information on claiming it. You will, however, need to repay the 3rd payment as requested in the letter as the IRS will not just "transfer" the credit amount between years or payments.
You may be looking at the 1040 amount due. When you file an amendment, whatever was corrected, will show on 1040 the corrected amount that should have been owed on the original tax return. This isn't an "additional" amount owed.
To see the amount you owe or refunded after the amendment has been filed, look at Form 1040-X Line 20 (if balance due) or Line 22 (if refund due). I'm assuming that since you added a business expense, you should have a refund due and would show on Line 22.
When amending the return it has to start exactly with the return as you filed or has changed by the IRS whichever was later. So before you started the amendment process, you should have removed the stimulus credit. Then part of the amendment process would have been adding the stimulus credit back in. Undo the amendment process and start over.
OK so I just don't click AMENDED in Turbo Tax and enter the Business deduction?
If I am reading your email correctly....I need to go in and FIRST take off the STIMULUS CREDIT of $2800?
Then add it back in and add my business Deduction?
This would have been helpful to know.
On Line 20 on the 1040-X it shows FEDERAL TAX Amount DUE $988 . So I don't understand why I would owe more taxes. I paid on the initial return just as TURBO TAX showed I owed..but as I stated in earlier message... the IRS sent me a letter stating we owed back the Stimulus Amount plus penalties because TURBO TAX allowed the Stimulus amount credit ($2800) even though it showed our AGI was $10 over the cap of $150,000 . So I started by amending the return by just entering a forgotten business expense ( $220). I have reviewed every form and it's identical to the original return sent, with the exception that now line 16 on the 1040X is showing a higher tax amount than original. So why would that increase if our AGI is now lower ($149,806)? On the 1040-X it shows a NET CHANGE OF INCREASE of $1020 in TAX LIABILITY Column 6B. Makes no sense to me. I have been using TurboTax for 20 plus years and first I have ever had to Amend. Can you explain what's happening?
Line 20 on 1040-X shows AMOUNT YOU OWE $988. Not sure why I owe more when I only added a business expense of $220.00 which lowered my AGI to $149,806....under the $150,000 to claim the Stimulus credit. I went back to the start and Amended the return again taking out the business deduction as well as the Stimulus..taking it back to the original. I first entered the business expense of $220 on Schedule C which lowered my AGI. Then went in and claimed the STIMULUS payments of $2800 (hubby and I). So I did everything as suggested. I just can't figure out why I now owe additional taxes of $988? This is an additional amount owed on top of what I have already sent in back last year which flagged the IRS because our AGI showed $150,010 ($10 over threshold to claim Stimulus Credit)....which TURBO TAX didn't catch.
Have any suggestions or anything I can try?
after verifying Form 1040-X line 11
check the payments and then Line 18
unfortunately, TurboTax 1040-X often has problems with Line 18.
your stimulus payment should show in line 15 col C
In addition to Fanfare's instructions, you must check your payments to ensure the additional payment sent is listed. If you sent the payment after the return was filed and didn't include the payment, the software has no way of knowing that an additional payment was already sent in.
Column A will show the original return, and Column B will show the corrections, and Column C will show you the difference. Verify lines 12-17 match what was paid into the IRS. Line 16 will be specifically for taxes paid with the return or an extension.
For more information on filing an amended return, see the link below:
Thank you. I have reviewed all lines. Still not understanding why the large difference in taxes. Can anyone explain why my taxes increased on my amendment when my AGI decreased for only $220? One would think that since my AGI decreased and now my Stimulus payment entered would be correctly entered, I would not owe anything additional on my amendment. Did taxes changes in TurboTax after I filed last year in March? This is only answer I came up with.
It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.
You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions:
In TurboTax Online, go to the black panel on the left side of your program and select Tax Tools.
In TurboTax CD/Download versions, go to the black panel on the top of your screen and select Online.
Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.
We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.
This is not a 2022 tax file but rather a 2021. DO you still want me to upload it per instructions?
The Recovery Rebate Credit (the official term for the stimulus payments) was reduced if your AGI was over $150,000 for Married Filing Jointly and was not eliminated completely unless your AGI was at $160,000 or above for Married Filing Jointly. The IRS is likely requesting the payment back because you actually received your stimulus check in early 2021 and then you claimed it as a credit on your tax return. That would equate to getting $5,600 in credit when you were entitled to $2,800.
If you received (and still have) your Letter 6475 you received in January - March 2022 reporting the amount of the stimulus you received in 2021 (there should be one letter for each recipient) you can verify your receipt of funds. If you do not have the letter, or never received it, you can check your account with the IRS.
We did not receive the 2nd payments. The IRS letter said it was because our AGI was over our threshold of $150,000...($150,010). AliciaP1 were you able to review our taxes? I replied with the TOKEN as you requested.
I meant to say we did NOT receive the 3rd payment. I went online to our accounts and it reads :
Use these amounts to calculate any Recovery Rebate Credit on your Tax Year 2021 return.
The American Rescue Plan Act (ARPA) of 2021 provides for a Recovery Rebate Credit for eligible individuals.
If you're eligible, you'll report the Recovery Rebate Credit on Line 30 of your tax year 2021 return. Use the Economic Impact Payment amount on this page when completing the worksheet included in the 1040 instructions to help you calculate any Recovery Rebate Credit you may be eligible for.
I did review your taxes and you do not need to amend your returns either way. The threshold was not $150,000 for eliminating the credit, only reducing it. Your percentage of reduction was 0.1% which calculates to $3 (rounded). This is the most they can be asking for as payback if you were entitled to take the credit on your tax return. If you checked your account via the link I provided and confirmed the IRS does not show you received the 3rd stimulus payment (2021 payments were the 3rd payment), you need to respond to the letter that you correctly claimed the credit on your tax return. The letter has a section about if you disagree and wish to respond. You need to compile the proof of information and respond according to that guidance.
If the issue is that you actually did not receive the 2nd stimulus payment (made in late 2020), you need to amend your 2020 tax return and can see Recovery Rebate Credit for more information on claiming it. You will, however, need to repay the 3rd payment as requested in the letter as the IRS will not just "transfer" the credit amount between years or payments.
After again reviewing the IRS letter we received....it definitely is the STIMULUS payment. Because they show the same calculations for taxable income as before...but what changed is the credit.....disallowed the Stimulus Credit So, it doesn't look like it is the taxes that were incorrectly calculated by Turbo Tax the first time around like I thought,So.......
How do I amend using TURBO TAX (Deluxe Edition) to calculate that credit and the taxes correctly? I have amended it, to include the business deductions and entered the Stimulus ($2800) back in the right place...but after just entering that little bit of business deduction, which lowered our AGI to $149,806, below the Stimulus threshold of $150,000 to claim credit, it lowered our taxable income to $123,656 BUT shows now that we owe $988. It jumped our taxes from $18,105 to $18,701? Now showing we owe $988? Wouldn't those taxes decrease because our Taxable income decreased? Nothing else changed..... we added that small business deduction. This is what it looks like on the AMENDED return.
AMENDED AGI $149,806 (Original $150,010)
Taxable Income Correct Amount $123,656.00 (Original $123,819)
Total Tax Correct Amount $18,701.00 (Original taxes $18,105)
Total Payments/Credit Correct Amount $18,105.00 (Original $16,962) Both amounts include the $1,143 we paid in with original return.
Payment Due $988.00 (Original $1,143.00)
On the IRS letter it shows they disallowed the $2800 Stimulus Recovery because our AGI was $10.00 above the allowed AGI.
Can anyone help? I have less than 10 days to get this corrected with the IRS per the IRS deadline date.
Thank you for your quick responses. for But I am a little confused. It was the 3rd payments we didn't receive.
In my letter from IRS it states The IRS changed the Recovery Rebate Credit because one of the following:
-The SS number of one or individuals claims as a qualifying dept was missing or inaccurate.
(We have no dependents)
-The last name of one or more individuals claimed as a dependent doesnt match our records.
(We have no dependents)
-One or more individuals claimed as a qualifity dependent exceed the age limit.
(We have no dependents)
-Your adjusted gross income exceeds $75,000 ($150,000 if married filing jointly,$112,500 if head of hh
-The amount was computed incorrectly.
Refer to an early response to this to see the breakdowns. It is clearly the STIMULUS Payment...that we never received. Maybe I should call the IRS?
-
After a long evening on hold with the IRS...it looks like the issue might be getting resolved.
Even though it doesn't show on their website in our records...they show that we received the Stimulus payment in 2021.So they asked me to complete and fax a 3911 Form. They have to do a trace on the payment to see if it actually remitted. It would have been a direct deposit. I went back thru all our bank statements for 2020 to current and it never made it. So hopefully this issue with the IRS will get resolved. Thank you to the tax professional ALICIAP1 for taking the EXTRA step to review my taxes and help me with this issue..you have no idea how grateful I am to you!