I got a letter from the IRS the other day saying I owed a huge amount on 2022 taxes.?ÿ After looking everything over, I think what happened was I printed out a 2023 estimated tax form instead of 2022 form and sent in a huge check. I have a copy of the canceled check with a US Treasury stamp on it. On the check I wrote 2022 est tax, but that probably wouldn't override the voucher form.
I'm trying to create a login with IRS to see my data and check if that is the explanation. I've spent an hour and a half going through their id.me contractor's hoops, and fell off the fast track somehow. Maybe because my documents have a mix of middle name or middle initial? Maybe because my internet provider looks like I'm in a different state?
So now I'm waiting for an email telling me they have looked at the pictures of additional documents and they are ready for a video call to interview me. What a process.
If I get past that, I may be able to verify my situation with IRS.
I don't know why IRS wouldn't take any money you send them and apply it to your debt, but that's red tape for you. I hope there is a chance to talk them into that and avoid the penalties.
Engineers, mathematicians and surveyors should consider dealing with the IRS as a fun challenge. Generally, my experiences have been positive over the numerous times I have dealt with them directly.
One year I called them up and asked them just how stupid they were. I walked them through my situation, with real numbers, until I reached a point where I could go with Option A or Option B, whichever I preferred. If I went with Option B and sent them something like $1000, then they would send me back something like $2300 and show a higher level of income for Social Security purposes. Option A had no such benefits. They congratulated me on finding a loophole in the tax code. So, I sent them money and they sent me a whole bunch more back a couple of months later.
Update: I did finally get cleared and looked at the IRS site, where I find it as I expected - credited to wrong year.
@holy-cow my late wife had a federal student loan through a bank that failed. Before we were even dating, she took out a second mortgage on her home and was required to pay that loan off. The mortgage company cut the check out of escrow and paid off the balance of the loan.
When we married and started filing joint tax returns it was the same aggravation for the six tax years before she passed away. The IRS would keep our tax return to pay off the already paid off debt and I would have to fight them tooth and nail, sending the paperwork proving the loan was paid off. After the fight, they would mail me a check with interest on what they held back and a tax form to claim the interest on my next tax filing. Thus, the definition of insanity.
Happy to report that after spending way too much time listening to the IRS hold music and being grilled for all kinds of info, I got someone to promise she had transferred the money from 2023 taxes to 2022 taxes. The account should settle withing a week or two.
Is that the way you do bookkeeping? If somebody hasn't paid for 2022 work but pays the invoice for more $ on 2023 work, do you still consider the 2022 bill overdue or do you credit it against the old debt and start over for 2023?
Anything that makes sense is in direct opposition to anything involving the IRS.
Pssssst. The IRS is monitoring this thread. Had to post the message above twice as it was "forbidden" the first time.
Engineers, mathematicians and surveyors
Most Surveyors I know have enough sense not to mess with the IRS. Please don't include or confuse us with those other foolish surveyor wannabes mentioned.
The tax laws are set up to direct people on how to spend money beyond basic survival and necessities. It works.
Most Surveyors I know have enough sense not to mess with the IRS.
I agree, as long as by "mess with" you mean "don't engage in tax evasion," as distinct from innocent mistakes or failing to meet IRS deadlines.
Regarding the latter, my business cash flow tends to be episodic. Depending on my work mix I might go 2 or 3 months with little or no income, then a bunch of receivables come in all at once. So I routinely miss my quarterly estimated tax payment dates, and make the payments whenever the bank balance permits. Sometimes the IRS catches this and sends me a bill for the fine and interest, and sometimes they don't.
I'm quite used to getting correspondence from the IRS, and it's a very civilized affair -- they bill me, and I pay (eventually). No hard feelings either way.
You need to read up on this:
estimated tax annualized method
I had a big RMD late in the year and the estimated tax computation wants to assume level income through the year. When I check this annualized box in the HR Block tax program it seems to make the penalty computation go away.
I may find out otherwise now that I put myself under their microscope, but it seems to be a useful tool.