i went back to h&r block and they did an ammendment and i was supposed to pay 900 because it was added income and i lost credits, now i didn't get anything in the mail or anything. i wonder how much i am going to have to pay. the 401k people took state and federal taxes out and all i had to do was pay the penalty i dont understand why i have to pay the penalty at tax file time.
2007-10-07 12:50:28 · 7 answers · asked by Spankster 1 in Business & Finance ➔ Taxes ➔ United States
There could be a number of reasons why the amount is what you have stated. The first of which is a penalty for underreporting you income when you filed. The second is the interest on the tax due when you should have reported the income. Forgetting to report income will not be excused because the 1099 forms had not arrived.
2007-10-07 13:05:35 · answer #1 · answered by ? 6 · 0⤊ 1⤋
You pay the penalty at tax time because you had 60 days after taking the distribution out to roll it over or you may not have been subject to it for other reasons. The party that prepares the 1099-R's have no idea about your personal circumstances so they just pull out the amount that is required to be pulled out...20% federal withholding and state tax withholding. You'd be equally as mad if they witheld this extra tax if you weren't subject to it. Especially if you rolled it over and had to come up with that extra tax out of your own pocket!
Question for you why didn't you tell H&R Block that you took a distribution from your 401k when they asked you about it? Second question is why didn't you get the 1099-R? Did you move and fail to provide a new address? And last question...why did you do a rapid refund? Makes no financial sense...but then again neither does taking a distribution from your 401k before retirement.
2007-10-08 03:07:08 · answer #2 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
You know you owe money because you lost credits and had additional income. What you need to do is pay the amount shown as the balance due on the amendment. Don't wait for a letter requesting payment, that will cost you more.
The IRS will figure any further penalty and interest and send you a bill. The IRS assesses penalties for not paying your taxes on time, plus they charge interest on the entire balance owed including penalties.
2007-10-07 15:47:38 · answer #3 · answered by ninasgramma 7 · 1⤊ 0⤋
There is a 10% penalty due on 401K withdrawals before ago 59-1/2. In addition, there are probably penalties and interest for filing the 1099 info late. If you haven't paid the 10% penalty before tax filing, it's due when you file.
2007-10-07 13:16:05 · answer #4 · answered by Judy 7 · 1⤊ 0⤋
YES, it will be applied against your delinquencies. You should NOT just accept that the amount they say you is right. Figure it out yourself, as IRS takes highest tax generating position. Do an amended return for 2008. Do you have expenses against the income? You blew it by "forgetting" to include all that stuff and you need to correct your errors. If you do nothing, the IRS will certainly take any refund due this year to satisfy last year's delinquencies. Don't ignore this. The IRS will collect what is owed them, and by not paying them, it only grows and grows with penalties and interest. So far only rumors of stimulus, there was the Making Work Pay Credit for 2009, though.
2016-04-07 09:59:43 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Are you sure the 401K people didn't withhold the penalty also?
If an amendment was filed, did you get a copy? Does it show an amount due? Eventually IRS is going to send you a letter asking for the money plus interest and penalties.
2007-10-07 15:27:19 · answer #6 · answered by bdancer222 7 · 0⤊ 1⤋
Go to a tax consultant...... and find out.......... not H & R block..... see what recourse you have...... good luck
2007-10-07 12:56:25 · answer #7 · answered by Anonymous · 0⤊ 1⤋