Level 5

Estimated tax penalty

Forum|Forum|2 years ago
March 25, 2024
8 replies
16 views

I figured my client owing $508 in estimated tax penalty. He doesn't like to pay estimated taxes and owed on his return $10,996. I set up for him to pay to an account through electronic filing. IRS just refunded him the $508 and the letter said no penalty. What is going on? He owed $11,440 in 2022.

ProSeries Tax

PATAX

Level 12

You haven't provided enough detail for us to know what is going on, unless someone here has mystical powers.

D

Debst99Author

Level 5

Patax-What other details do you need?

PATAX

Level 12

Details of letter

dkh

Level 15

That's interesting.

Did you get to see the letter? Was there some explanation/calculation?

D

Debst99Author

Level 5

No, I didn't see the letter but he got a check and I told him to wait for the letter to call back. He just called back and said he got the letter. He doesn't understand how to read me the letter. Do I need to call him back to look at the letter.

BobKamman

Level 15

Was the Form 2210 and penalty amount included with the return you filed? Or did it show just the tax owed, and you assumed they would calculate the penalty? Was it filed electronically, or on paper? What date did you use for figuring the penalty? I wouldn't be surprised if he gets a bill in July.

D

Debst99Author

Level 5

Bob-Proseries figured the penalty.

BobKamman

Level 15

@Debst99 This is like pulling teeth. Was the 2210 included with the return you filed? Was it sent electronically, or paper filed? What date did you use for figuring the tax payment date?

My guess is still that only the tax was shown on the return, IRS has no way of knowing why the extra $500 was paid, they'll eventually get around to billing it based on the exact payment date.

qbteachmt

Level 15

"I figured my client owing $508 in estimated tax penalty."

How did you figure that? Which program are you using?

"He doesn't like to pay estimated taxes and owed on his return $10,996."

Meaning he never prepays at all, or only pays through withholding?

Don't yell at us; we're volunteers

D

Debst99Author

Level 5

qb-no withholding done on his pensions or social security.

abctax55

Level 15

What State/zip code?

Any '2023 Disaster Declarations' in play?

HumanKind... Be Both

D

Debst99Author

Level 5

abctax-no to your question.

PATAX

Level 12

@Debst99 is your client a farmer? Per quick finder page 6-21: "No penalty for failing to make estimated tax payments for 2023 if at least two-thirds of total gross income was from farming or fishing during 2022 or 2023 and Form 1040 is filed and all the tax due is paid by March 1st 2024."

sjrcpa

Level 15

"He doesn't understand how to read me the letter."

I love this. 🙄

The more I know the more I don’t know.

IRonMaN

Level 15

I've had clients attempt to read me those kind of letters over the phone --------- pure misery as they read everything they can find except what I really need to know.

Slava Ukraini!