You told me in our original conversation on this topic over at the bad cat, that tax preparers rely on software so none of us know anything. I just wanted to let you know that is indeed the case for many tax preparers, I will agree with you on that point, however, I am not your ordinary tax preparer. I'm TheeAccountant, and I wrote my own excel spreadsheet to reconcile tax returns to my workpapers when I was working with some cheap software that sucked. I know how all the numbers flow on forms 1040, 1041, 1065, 1120s, and 1120, and your calculation above is incorrect.
The $21,411 would have been only federal income tax withheld on the W-2. Social security and Medicare do not show up anywhere on the form 1040. They are used in other calculations on other schedules but are not part of that line. You paid in $23,354 in federal income tax and you owed $10,650, which makes for a refund of $12,704 - with two years of interest on that amount that should be the $13,419. So, the $13,419 looks to be the amount you over-paid in 2020, including interest.
As to why it's negative, it's a reduction in the credit to your account and it's getting added back to what is owed because it's frozen (they're holding it because you've been hit with penalties). If it was a positive number there, it would have reduced the amount held. So, you would have gotten a refund, with interest no less, if you'd filed an accurate return. You will never see that money now. Me personally, I can think of better things to do with my money than to give it to the government unnecessarily. Which is what has happened here. Whenever my clients pay penalties because they didn't make the quarterly payments that I told them to make, it hurts my heart. Why are you giving more money you didn't have to give to the federal government??
Also, in one of the other posts, you said they "stole" from your 2021 over-payment to pay the penalties they applied in 2020. Yes, they do that because you are accruing interest every day on those penalties, so applying the over-payment stops the interest accruing. Nice of them, eh?
You know, if you're going to try these shenanigans, which I strongly advise against [like please, PLEASE, don't do this], I'd at least make sure that you hadn't over-paid and were due a five-figure refund for multiple years. What a very expensive lesson.
At any rate, this has been an interesting exercise much in the vein of Don Quixote. I do seriously appreciate you posting all of these notices. I've never seen these some of these before.
How unfortunate this is the level of "expertise" ordinary citizens are subjected to.
Point #1 - I correctly reported the total amount of federal income tax withheld on line 25a of my 2020 return.
On line 25a the amount I reported is the total amount of federal income tax withheld. Your certainty that the amounts labeled as FICA & Medicare are NOT included in 'federal income tax withheld' is revealed as false by 26 USC 3503: Erroneous payments
"Any tax paid under chapter 21 or 22 by a taxpayer with respect to any period with respect to which he is not liable to tax under such chapter shall be credited against the tax, if any, imposed by such other chapter upon the taxpayer, and the balance, if any, shall be refunded."
Note that CHAPTER 21-FEDERAL INSURANCE CONTRIBUTIONS ACT
So, as neither myself nor my kids were "employees" for 2020 we therefore earned no "wages" and are not liable, and if those taxes are not credited under another chapter (they aren't) then the BALANCE SHALL BE REFUNDED.
Point #2 - I already showed how the $13,419 was calculated and it is not what you claim it is.
I already pointed out notice cp12 in part four, where the 'account balance before the change' shown on the notice was the $23,354 reported on line 25d of my 1040, which includes all of the $21,411 on line 25a, as it is the entire amount withheld, and this is a negative number, which means it is the amount owed back to me (a credit).
I also showed you how they lied about why they adjusted that number and how that number was calculated. The $9935 adjustment is clearly labeled, "DECREASE IN CREDIT FOR TAX WITHHELD."
Decrease = amount reduced, a debit
Credit for tax withheld = amount I paid, and am due
Nowhere in notice cp12 is there any debit against my credit for TAX DUE, nor any amount of interest being applied to any remaining credit.
Point #3 - the $13,419 is negative from the irs' perspective because it is an amount owed by them to me.
It is nonsense for you to assert that an amount OWED TO ME should be added to an amount they claim I OWE. They obviously offset each other.
So, you are wrong about the tax withheld (per the code above) and wrong about the adjustment to the amount withheld and wrong about why the amount shown is negative. You are not giving my audience much confidence in the general level of tax expertise among the class of licensed CPAs.
Which is why I can't reiterate enough, that you have to do your own research and stop relying on these supposed experts - NOT EVEN ME!!!
$21,411 on line 25a should only be income taxes withheld from box 2 on the form W-2, not payroll taxes (social security and medicare from box 4 & 6 on form W-2).
If you subtract what is on the form you have breaking out what you say are your income taxes withheld and your payroll taxes withheld it doesn't add up to that.
11,476.96
9,934.04
1,367.47
------------
18,691.52
(21,411)
--------------
2,719.48 variance
So even if you erroneously put on line 25a all the taxes paid according to the form you filed there, it still doesn't add up.
You have no idea what you're talking about. You have no idea what you're doing. I deal with this stuff all the time, and you're trying to make-believe that you know more than I do about this. You know nothing, Jon Snow. You ain't getting a refund and the only reason you ain't going to jail is because you've paid everything including the penalties by over-withholding with a free loan to the federal government. You can't make this shit up.
The sum of $11,476 (line 7 of my form 4852) and $9,935 (the irs decreased the reported withholding by this amount) is $21,411 (as reported on line 25a of my 1040).
The $1,367.47 you show above is included in the $9,935.
The sum of 11,476.96 + 9,934.04 + 1,367.47 is 22,778.47 but is meaningless.
The $18,691.52 is the total amount of my withholding, I did not show you the forms 4852 for my kids.
I'm sorry to say you have not represented yourself as a professional. You do not read and cannot understand the law in the field you are supposed to be the expert in.
Income taxes are not payroll taxes lol. Surely you know that. Check your calculations again, they are wrong. I look at these forms every damn day of my existence.
Btw, I’ve figured out why they haven’t charged you with tax evasion- you’ve paid all the taxes you owe. Too funny. What a farce.
There is no "payroll taxes" in the code. There is Subtitle C - Employment Taxes, but these are a subset of and are treated no differently from the federal income tax:
§3501. Collection and payment of taxes
(a) General rule
"The taxes imposed by this subtitle shall be collected by the Secretary and shall be paid into the Treasury of the United States as internal-revenue collections."
I already showed you above that any amount not credited against any tax is required to be refunded.
You look at the forms everyday, but you do not look at or read the code. You assume you already know everything the code says, but I keep showing you what it says and yet you remain ignorant.
Reminds me of all those 'experts' chanting "safe and effective" till they're blue in the face. Some people you just can't reason with.
Thanks for the insight. And I respect you for having the balls to stand up to the crooked feds. I hope it works out. I’ll be following with interest
You told me in our original conversation on this topic over at the bad cat, that tax preparers rely on software so none of us know anything. I just wanted to let you know that is indeed the case for many tax preparers, I will agree with you on that point, however, I am not your ordinary tax preparer. I'm TheeAccountant, and I wrote my own excel spreadsheet to reconcile tax returns to my workpapers when I was working with some cheap software that sucked. I know how all the numbers flow on forms 1040, 1041, 1065, 1120s, and 1120, and your calculation above is incorrect.
The $21,411 would have been only federal income tax withheld on the W-2. Social security and Medicare do not show up anywhere on the form 1040. They are used in other calculations on other schedules but are not part of that line. You paid in $23,354 in federal income tax and you owed $10,650, which makes for a refund of $12,704 - with two years of interest on that amount that should be the $13,419. So, the $13,419 looks to be the amount you over-paid in 2020, including interest.
As to why it's negative, it's a reduction in the credit to your account and it's getting added back to what is owed because it's frozen (they're holding it because you've been hit with penalties). If it was a positive number there, it would have reduced the amount held. So, you would have gotten a refund, with interest no less, if you'd filed an accurate return. You will never see that money now. Me personally, I can think of better things to do with my money than to give it to the government unnecessarily. Which is what has happened here. Whenever my clients pay penalties because they didn't make the quarterly payments that I told them to make, it hurts my heart. Why are you giving more money you didn't have to give to the federal government??
Also, in one of the other posts, you said they "stole" from your 2021 over-payment to pay the penalties they applied in 2020. Yes, they do that because you are accruing interest every day on those penalties, so applying the over-payment stops the interest accruing. Nice of them, eh?
You know, if you're going to try these shenanigans, which I strongly advise against [like please, PLEASE, don't do this], I'd at least make sure that you hadn't over-paid and were due a five-figure refund for multiple years. What a very expensive lesson.
At any rate, this has been an interesting exercise much in the vein of Don Quixote. I do seriously appreciate you posting all of these notices. I've never seen these some of these before.
How unfortunate this is the level of "expertise" ordinary citizens are subjected to.
Point #1 - I correctly reported the total amount of federal income tax withheld on line 25a of my 2020 return.
On line 25a the amount I reported is the total amount of federal income tax withheld. Your certainty that the amounts labeled as FICA & Medicare are NOT included in 'federal income tax withheld' is revealed as false by 26 USC 3503: Erroneous payments
"Any tax paid under chapter 21 or 22 by a taxpayer with respect to any period with respect to which he is not liable to tax under such chapter shall be credited against the tax, if any, imposed by such other chapter upon the taxpayer, and the balance, if any, shall be refunded."
Note that CHAPTER 21-FEDERAL INSURANCE CONTRIBUTIONS ACT
So, as neither myself nor my kids were "employees" for 2020 we therefore earned no "wages" and are not liable, and if those taxes are not credited under another chapter (they aren't) then the BALANCE SHALL BE REFUNDED.
Point #2 - I already showed how the $13,419 was calculated and it is not what you claim it is.
I already pointed out notice cp12 in part four, where the 'account balance before the change' shown on the notice was the $23,354 reported on line 25d of my 1040, which includes all of the $21,411 on line 25a, as it is the entire amount withheld, and this is a negative number, which means it is the amount owed back to me (a credit).
I also showed you how they lied about why they adjusted that number and how that number was calculated. The $9935 adjustment is clearly labeled, "DECREASE IN CREDIT FOR TAX WITHHELD."
Decrease = amount reduced, a debit
Credit for tax withheld = amount I paid, and am due
Nowhere in notice cp12 is there any debit against my credit for TAX DUE, nor any amount of interest being applied to any remaining credit.
Point #3 - the $13,419 is negative from the irs' perspective because it is an amount owed by them to me.
It is nonsense for you to assert that an amount OWED TO ME should be added to an amount they claim I OWE. They obviously offset each other.
So, you are wrong about the tax withheld (per the code above) and wrong about the adjustment to the amount withheld and wrong about why the amount shown is negative. You are not giving my audience much confidence in the general level of tax expertise among the class of licensed CPAs.
Which is why I can't reiterate enough, that you have to do your own research and stop relying on these supposed experts - NOT EVEN ME!!!
To whit:
$21,411 on line 25a should only be income taxes withheld from box 2 on the form W-2, not payroll taxes (social security and medicare from box 4 & 6 on form W-2).
If you subtract what is on the form you have breaking out what you say are your income taxes withheld and your payroll taxes withheld it doesn't add up to that.
11,476.96
9,934.04
1,367.47
------------
18,691.52
(21,411)
--------------
2,719.48 variance
So even if you erroneously put on line 25a all the taxes paid according to the form you filed there, it still doesn't add up.
You have no idea what you're talking about. You have no idea what you're doing. I deal with this stuff all the time, and you're trying to make-believe that you know more than I do about this. You know nothing, Jon Snow. You ain't getting a refund and the only reason you ain't going to jail is because you've paid everything including the penalties by over-withholding with a free loan to the federal government. You can't make this shit up.
<sigh> I'll try to explain it to you again:
The sum of $11,476 (line 7 of my form 4852) and $9,935 (the irs decreased the reported withholding by this amount) is $21,411 (as reported on line 25a of my 1040).
The $1,367.47 you show above is included in the $9,935.
The sum of 11,476.96 + 9,934.04 + 1,367.47 is 22,778.47 but is meaningless.
The $18,691.52 is the total amount of my withholding, I did not show you the forms 4852 for my kids.
I'm sorry to say you have not represented yourself as a professional. You do not read and cannot understand the law in the field you are supposed to be the expert in.
Income taxes are not payroll taxes lol. Surely you know that. Check your calculations again, they are wrong. I look at these forms every damn day of my existence.
Btw, I’ve figured out why they haven’t charged you with tax evasion- you’ve paid all the taxes you owe. Too funny. What a farce.
There is no "payroll taxes" in the code. There is Subtitle C - Employment Taxes, but these are a subset of and are treated no differently from the federal income tax:
§3501. Collection and payment of taxes
(a) General rule
"The taxes imposed by this subtitle shall be collected by the Secretary and shall be paid into the Treasury of the United States as internal-revenue collections."
I already showed you above that any amount not credited against any tax is required to be refunded.
You look at the forms everyday, but you do not look at or read the code. You assume you already know everything the code says, but I keep showing you what it says and yet you remain ignorant.
Reminds me of all those 'experts' chanting "safe and effective" till they're blue in the face. Some people you just can't reason with.