Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

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Chip
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Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by Chip » Mon Apr 16, 2018 8:17 am

Small problem here. I would appreciate advice on how to proceed to avoid having to call the IRS in the future.

I expected to file my return on time and scheduled an EFTPS payment categorized as "Payment with Return, Notice, or Installment Agreement". That payment is being made today and can't be cancelled or amended.

I am now thinking I will receive an amended 1099-DIV that will affect the amount of Roth recharacterization that is optimal. So I will be filing a Form 4868 extension. But EFTPS has a specific category for payments made with extensions. If one uses that category, F4868 isn't required.

Since I didn't use that category, Form 4868 will have to be sent. But I won't be including a check since I've already made an EFTPS payment of the amount due.

1. Is this a problem? I know the EFTPS payment will be credited to my account for the correct tax year, but do I have to worry that there's no check sent in with the F4868 and there is no electronic payment that is specifically associated with F4868?

2. Should I list the amount of the EFTPS payment that I made on Line 7 of the 4868? I'm pretty sure the answer is yes, even though my payment isn't categorized correctly.

3. I could make another EFTPS payment that is correctly categorized and skip the Form 4868. But I would then put both payments on the "paid with Form 4868" line of my 1040. The payment's only $600 so I don't mind losing a few dollars of interest by double paying if I'm likely to avoid having to get on the phone with the IRS. Or maybe just make this payment $1?

Suggestions?

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midareff
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by midareff » Mon Apr 16, 2018 8:49 am

I suspect they will "get it", but of course that may not be what they conclude. I have been using EFTPS quarterly for about the last 5 years, retired in 2012. My current approach is use 110% of last year tax divide by 4, and set the EFTPS based on that. I don't expect RMD to change much year to year so that should do it for quite awhile.

Chip
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by Chip » Mon Apr 16, 2018 9:38 am

I took a chance and called the EFTPS help line to see if they could recategorize the payment.

The good news: I got right through to a human.

The bad news: She couldn't recategorize the payment. She didn't have any useful information. She suggested I call the main IRS number in 10 business days and get them to recategorize it.

Chip
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by Chip » Wed Apr 18, 2018 3:34 am

I decided to do the $1 "extension" payment via EFTPS, which allowed me to avoid filing a paper 4868.

I am thinking I will treat the ETFPS "payment with return" as an extra estimated payment when I ultimately file. If I get some kind of notice I'll deal with the IRS phone system at that point.

Chip
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by Chip » Mon May 28, 2018 11:48 am

Update: It appears the above strategy worked as expected.

I e-filed my return on 5/19. My refund in the expected amount was direct deposited on 5/25. Five business days!

So I doubt if there is going to be any sort of problem that will require contact with the IRS. My experience with Tax-Aide is that the IRS catches any mismatches between estimated payments and payments with returns reported vs. actually paid before issuing any refunds. Since I received the expected refund I think it's case closed.

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dual
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by dual » Mon May 28, 2018 12:11 pm

Somewhat off topic but relevant.

Why use EFTPS?

I pay my taxes with my BofA Premium rewards credit card. Since I have over $100K in my MerrillEdge account, I get an effective rebate of 2.625% with no limit on the maximum yearly rebate. The payment on pay1040.com charges 1.87% so I make 0.755% on the payments.

There are many other cashback credit cards. For example, Alliant Credit Union has a card that returns 3% with no annual fee for the first year: http://www.alliantcreditunion.org/bank/ ... ature-card

I get control over when the payment comes from my checking account and an electronic confirmation.

Granted, AFAIK I cannot schedule the payments in advance but I simply put in ticklers into my personal information manager program at the start of the tax year.

Chip
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by Chip » Mon May 28, 2018 12:57 pm

dual wrote:
Mon May 28, 2018 12:11 pm
Somewhat off topic but relevant.

Why use EFTPS?

I pay my taxes with my BofA Premium rewards credit card.
1. I won't ever do business with BofA in any way, shape or form. They refused to honor a POA that had been approved in writing by a bank they later acquired and were complete [expetive deleted]s about it. They were an early addition to the long list of companies I no longer do business with. At the rate the list is growing it's a tossup whether or not I'll have anywhere left to buy essential goods & services before I croak. :P

2. I already have an 8 page "if I die" set of instructions for DW. I don't want the hassle of continually updating it by playing the credit card rewards game.

3. I have a 2% cashback card. It's good enough. But using it to gain .125% on my tax payments isn't worth it to me.

4. The scheduling feature of EFTPS is important to me. Part of the "if I die" instructions is that she doesn't have to worry about estimated tax payments for the rest of that tax year as they are all calculated and scheduled.

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Epsilon Delta
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by Epsilon Delta » Mon May 28, 2018 1:31 pm

Chip wrote:
Mon May 28, 2018 12:57 pm

4. The scheduling feature of EFTPS is important to me. Part of the "if I die" instructions is that she doesn't have to worry about estimated tax payments for the rest of that tax year as they are all calculated and scheduled.
I'm not sure if a payment scheduled by a dead person is going to happen. Both legally and as a practical matter it may no longer be authorized.

In any case she still has to worry that there is money in the account at the time the transfer is scheduled. Maybe you have already taken care of that, but when I've dealt with a death my checking account balance bounced around a lot. Worrying about something somebody else had done is not something I would have appreciated.

One of the reasons I don't schedule future payments is that it seems like just as much trouble to make sure I have funds to cover a previously scheduled payment as it does to just make the payment when due.

Chip
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Re: Avoiding IRS hassle: Form 4868 and miscategorized EFTPS payment

Post by Chip » Mon May 28, 2018 1:41 pm

Epsilon Delta wrote:
Mon May 28, 2018 1:31 pm
I'm not sure if a payment scheduled by a dead person is going to happen. Both legally and as a practical matter it may no longer be authorized.

In any case she still has to worry that there is money in the account at the time the transfer is scheduled. Maybe you have already taken care of that, but when I've dealt with a death my checking account balance bounced around a lot. Worrying about something somebody else had done is not something I would have appreciated.

One of the reasons I don't schedule future payments is that it seems like just as much trouble to make sure I have funds to cover a previously scheduled payment as it does to just make the payment when due.
You have a point there that I will have to consider. Though in my case the funds come from a joint brokerage account and there will always be a sufficient balance to cover the payments.

I suppose if your first point is correct then I could set up an EFTPS account under her SSN and set up the payments that way. Though her SSN is already attached to the payments that are set up under my SSN.

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