TurboTax asked if I made tax payments in 2022. I made a payment of $2,742 in April of 2022. It told me my fed return would be $3,675. I got ~$750. Why? I have no debts.

[zenny75]

In 2022, the company I worked for went public, gave me a ton of (taxed) assets, which made my income double on my W-2. (I didn't actually "make" this money and couldn't spend it, so the fact that I got a huge tax bill because of it was very annoying.)

However, on my tax returns this year, I was asked if I had made any tax payments in 2022. After I inputted that I in fact did pay the IRS $2,742 last year, TurboTax digitally and verbally insisted I would get a huge refund this year due to this fact.

My return was filed, and it got accepted by the IRS. But then it got delayed, and finally, I received WAY less than $3,675 (about $750).

I called the federal reserve hotline to confirm that there were no debts collected out from my check. There wasn't.

In addition, my id.me account shows $3676 as the stated number on my return. However,  I HAVE NOT RECEIVED A NOTICE IN THE MAIL about a deduction to my return, so TurboTax's helpers that I paid extra for say they cannot do anything. 

TurboTax still proudly asserts that my Fed return was for $3,675, and when I called their phone number to talk to someone, the agent told me that their system says this was sent to me.

Can someone please help explain what is going on?

[JohnB5677]

I'm guessing that you company went public in 2021, which increased your W-2 for 2021.  You then did your tax return in 2022 and owed a large amount.

I understand that you made a payment of $2,742 in 2022.  What was it for?

• Was it for payment of taxes that were due in 2021, or
• Was it for estimated taxes that you paid for 2022 because you were expecting a large tax bill?

With the numbers you're showing, it certainly seems like the IRS does not think it was an estimated payment for your 2022 tax return.  It think that the $2,742 was the payment for your 2021 taxes and should not have been carried onto your 2022 tax return.

If this does not completely answer your question, please contact us again and provide some additional details.

[zenny75]

Thank you, this is a very helpful response! 

The question as stated on the form is super confusing: "2022 estimated tax payments and amount applied from 2021 return"

I interpreted that to mean, "tax payments made in 2022 from 2021 return". Apparently, so did the turbotax agents...? 

[JulieS]

The phrase "amount applied from 2021 return" refers to a situation where you had a refund in 2021 and you chose to apply the amount to your 2022 estimated taxes rather than getting a check or direct deposit. 

2022 estimated tax payments are quarterly payments that you make when you think you will owe more tax than the amount you are having withheld. 

Entries for either of these will be added as payments to your return and you will show a higher refund. Fortunately the IRS knows whether you made those payments and adjusted your refund.