Tax help - Discrepancy on amount owed; Need to file for extension

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bbrock
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Tax help - Discrepancy on amount owed; Need to file for extension

Post by bbrock » Sun Apr 07, 2019 4:22 pm

Hi Bogleheads,
I have not filed my taxes yet b/c I am still waiting for my employer to mail me a corrected W2. I don't want to have to file only to amend. So, I was thinking about filing for an extension. Since I use TT Deluxe to normally prepare and file, I used TT Taxcaster to estimate my 2018 taxes. That showed $137 owed. I questioned this amount, so I tried the Tax Estimator at HR Block. That showed I may owe $2951. That is quite a large discrepancy.

Is there a better way to estimate if I owe? Normally, I have adjusted our W-4's so that we are either over/under by $1k. However I don't know how to proceed.

Can I just file for an extension and then just make a random payment i.e. $3000. When I do my taxes, it will eventually get rectified and straightened, right?

Tx,
B
bbrock

Shallowpockets
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by Shallowpockets » Sun Apr 07, 2019 4:26 pm

Forget the extension. Just file and pay the $2951. You are already prepared to file an extension and pay $3000 upfront. So just file and be done wih it now. Any descrepencies will be rectified by the IRS or you later.

Gill
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by Gill » Sun Apr 07, 2019 4:32 pm

bbrock wrote:
Sun Apr 07, 2019 4:22 pm

Can I just file for an extension and then just make a random payment i.e. $3000. When I do my taxes, it will eventually get rectified and straightened, right?
Yes, do exactly that. You don’t want to file an incorrect return.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

Topic Author
bbrock
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by bbrock » Sun Apr 07, 2019 9:18 pm

I agree the better answer is to file the extension, pay the 3K now, and file a correct return when I get the proper W-2.

Would not it be smarter to pay the larger figure of $3000 that was approximately estimated between the two software applications and have it worked out after the fact, rather than the conservative number, possibly underpaying, and having it worked out after the fact?
bbrock

livesoft
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by livesoft » Sun Apr 07, 2019 9:22 pm

Form 4868 is to file an extension, but guess what? You don't even have to send it in nor e-file, so don't get trapped into paying TurboTax or anyone even a postage stamp to file an extension.
IRS Form 4868 wrote:Making Payments Electronically
You can pay online with a direct transfer from your bank
account using Direct Pay, the Electronic Federal Tax Payment
System, or by debit or credit card. You can also pay by phone
using the Electronic Federal Tax Payment System or by debit or
credit card. For more information, go to www.irs.gov/Payments.
Confirmation number. You’ll receive a confirmation number when
you pay online or by phone. Enter the confirmation number below
and keep it for your records.
Enter confirmation number here ▶
Note: If you use an electronic payment method and indicate the
payment is for an extension, you don’t have to file Form 4868. You
should pay the entire estimated tax owed or you could be subject to
a penalty. Your extension will be automatically processed when you
pay part or all of your estimated income tax electronically.
I am going to do exactly what the note says.
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spectec
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by spectec » Sun Apr 07, 2019 9:41 pm

Your idea to extend and pay the $3,000 is exactly the correct thing to do. Its much better to file an original return on extension than to file now with incomplete information and then file an amended return later. When you file your return, any overpayment you made will ben refunded to you, or you could apply it to estimated tax for the current year - your choice.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

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SlowMovingInvestor
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by SlowMovingInvestor » Mon Apr 08, 2019 6:58 pm

livesoft wrote:
Sun Apr 07, 2019 9:22 pm
Form 4868 is to file an extension, but guess what? You don't even have to send it in nor e-file, so don't get trapped into paying TurboTax or anyone even a postage stamp to file an extension.
Not to hijack the thread but --

What if you just pay a nominal amount of $1 or even 1c ? You get an extension, even an electronic acknowledgement, and the most you lose is interest on $1 for a few months. Cheaper than a postage stamp, no need to create a TT online account. So you can do this even if you don't really expect to owe anything.

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CAsage
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by CAsage » Mon Apr 08, 2019 7:09 pm

If you plan to use TurboTax, have you not already purchased or done an online 'real' return with the numbers you believe to be correct? I'd be completely uncomfortable without printing out both those estimates and comparing them line for line. Yes, you can pay the $3k (give or take change) and get it back when you file correctly, but can you not get a better handle on what you really owe?
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

spectec
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by spectec » Mon Apr 08, 2019 9:21 pm

SlowMovingInvestor wrote:
Mon Apr 08, 2019 6:58 pm
livesoft wrote:
Sun Apr 07, 2019 9:22 pm
Form 4868 is to file an extension, but guess what? You don't even have to send it in nor e-file, so don't get trapped into paying TurboTax or anyone even a postage stamp to file an extension.
Not to hijack the thread but --

What if you just pay a nominal amount of $1 or even 1c ? You get an extension, even an electronic acknowledgement, and the most you lose is interest on $1 for a few months. Cheaper than a postage stamp, no need to create a TT online account. So you can do this even if you don't really expect to owe anything.
Paying $1 will validate the extension, avoiding a 5% per month penalty, but you'll pay close to 1% per month on the unpaid balance between Apr 15 and whenever the return is filed. So if there's potentially a balance due, he will lose much more than the interest on $1.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

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SlowMovingInvestor
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by SlowMovingInvestor » Mon Apr 08, 2019 9:36 pm

spectec wrote:
Mon Apr 08, 2019 9:21 pm
SlowMovingInvestor wrote:
Mon Apr 08, 2019 6:58 pm
livesoft wrote:
Sun Apr 07, 2019 9:22 pm
Form 4868 is to file an extension, but guess what? You don't even have to send it in nor e-file, so don't get trapped into paying TurboTax or anyone even a postage stamp to file an extension.
Not to hijack the thread but --

What if you just pay a nominal amount of $1 or even 1c ? You get an extension, even an electronic acknowledgement, and the most you lose is interest on $1 for a few months. Cheaper than a postage stamp, no need to create a TT online account. So you can do this even if you don't really expect to owe anything.
Paying $1 will validate the extension, avoiding a 5% per month penalty, but you'll pay close to 1% per month on the unpaid balance between Apr 15 and whenever the return is filed. So if there's potentially a balance due, he will lose much more than the interest on $1.
I should have clarified -- I wasn't really referring to the OPs situation, but that of someone who expected to either owe a nominal amount or even get a small refund back. In that case, this seems like a quick way of getting an extension online (which the IRS does not allow you to do otherwise).

Topic Author
bbrock
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by bbrock » Mon Apr 08, 2019 10:31 pm

Tx for the replies you all.

Licesoft, I’ve used EFTPS previously, however I never knew about using it that way to validate an extension. Very clever. I went on the site last night however I completely forgot my password and pin. So the Fed is sending me another one in seven days. Will be cutting it very close. Great idea though.

Spectec, you echo my thoughts on both posts. And further you were sharing my same thought process on the idea of paying a dollar or one cent. I’d be paying a heck of a lot more due to the underpayment penalty and/or interest.

CAsage. I’m off tomorrow so I’ll play around with TurboTax. I didn’t think to input the figures that should be reflected on my W-2. While I was informed they are sending me a W2-C, I have no idea when I will receive it. It would just be my luck that it is corrected, but they then use some other figure.

So, the safest bet would be to pay let’s say $3k via the EFTPS method, and then file when I get that corrected W-2. Whatever money is over, would be refunded back to me. Sure no interest on that, but at least I didn’t pay the IRS more than they deserve. The other option is to run TurboTax with the figures from what the W-2 ought to be, see what the end result is, and then plan accordingly.
bbrock

livesoft
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by livesoft » Mon Apr 08, 2019 10:35 pm

One can still use DIrectPay and not bother with EFTPS.

Why does my head itch so much?
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Topic Author
bbrock
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by bbrock » Tue Apr 09, 2019 8:32 am

Then I’m mistaken when I had read your post live soft. When I read an electronica Federal tax payment system I went to that site.

As far as your head, sounds like a classic case of nits. :wink:
bbrock

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FiveK
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by FiveK » Tue Apr 09, 2019 2:27 pm

bbrock wrote:
Mon Apr 08, 2019 10:31 pm
I’m off tomorrow so I’ll play around with TurboTax. I didn’t think to input the figures that should be reflected on my W-2.
I wouldn't use any of the shortcut estimation programs in your situation. Your plan to use the full program seems best.

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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by kaneohe » Wed Apr 10, 2019 8:27 am

bbrock wrote:
Sun Apr 07, 2019 4:22 pm
Hi Bogleheads,
I have not filed my taxes yet b/c I am still waiting for my employer to mail me a corrected W2. .......................................
Can't you use your final paystub to determine what the W2 should look like? Even if you use incorrect numbers, seems like you should get similar numbers from different calculators unless you have a complex situation that simple calculators cannot handle.

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bbrock
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by bbrock » Wed Apr 10, 2019 9:42 am

Ran through the federal return with TurboTax deluxe yesterday. W2 with errors, $1210 owed. Corrected W-2 that should be coming, $1144 owed. Wow, that’s a huge difference between both tax caster and HR block forecaster. So the best calculator is using the program itself.

And I have not even run my CA yet, which should also have a discrepancy.

What do you think? Pay the feds $66 extra and wait for the hardcopy of my W-2 correct in mail, or pay based on the correct numbers I already have?

I’m partial to paying $66 extra just because it has already been greater than a one month process to get my employer to provide a corrected W-2. Two times they thought their numbers were correct, the third time I slam them with so much data and evidence and tax law it cannot be refuted. They basically were not calculating or understanding commuter deductions are pretax. So I’m partial to pay $66 based on the lack of trust in the competence of the third party administrator who processes payroll/W-2’s. I am expecting a W-2 C that is still incorrect.
bbrock

kaneohe
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by kaneohe » Wed Apr 10, 2019 10:38 am

What kinds of items are on your tax returns? The simple tax calculators can handle wages, interest, dividends, cap gains, SS, SE income,
deductions like mortgage interest, taxes,charitable contributions and some credits. Do you have other "unusual" items in yours?

spectec
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by spectec » Wed Apr 10, 2019 10:52 am

I'd round it up and pay $1,300 with the extension, knowing that I'll get either $90 or $156 in my refund when the return is filed. Receipt of the refund also serves to confirm that the return was processed. (Processing is likely to be a bit slower than normal because you have to indicate you're working from a "corrected" W-2). So you want to have evidence that the return was "filed" and also that it was "processed".

Round numbers are always easier to work with when the figures get cold and you're reconstructing.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

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FiveK
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by FiveK » Wed Apr 10, 2019 11:30 am

bbrock wrote:
Wed Apr 10, 2019 9:42 am
Ran through the federal return with TurboTax deluxe yesterday. W2 with errors, $1210 owed. Corrected W-2 that should be coming, $1144 owed. Wow, that’s a huge difference between both tax caster and HR block forecaster. So the best calculator is using the program itself.
Indeed it is.

The web-based shortcut programs often omit various credits, or request that one input the credit amount rather than have the program calculate it. The two most common downloadable spreadsheets are better.
What do you think? Pay the feds $66 extra and wait for the hardcopy of my W-2 correct in mail, or pay based on the correct numbers I already have?
Paying the exact number corresponding to the forms you use on the return seems best.

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bbrock
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Re: Tax help - Discrepancy on amount owed; Need to file for extension

Post by bbrock » Fri Apr 12, 2019 8:15 pm

Ok. Finally had a chance to get back to it and finish the run-through including CA. With all the proper numbers, I am looking at $1,144 owed for Fed and CA refund of $88. So, I'll pay that amount to the Feds using the Direct Pay IRS site that Livesoft shared, and get 'er done. Then, just wait around for this Corrected W-2 to come and check to see if yet again I'll have to battle my employer to send a Correction for their Corrected W-2. :shock:

Thanks for all your help everyone. Greatly appreciated. IPA's all around. :sharebeer
bbrock

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