Estimated tax payments

[PATAX]

Client got married during 2023. He pays estimates significant. I did not do his wife's return last year but I will be doing it this year when they file joint. She also paid estimates this year under her social security number. When I file joint the husband will be the primary taxpayer, will there be an issue with the IRS matching up the estimated payments of the wife? I'm not sure since covid things aren't always right.

[sjrcpa · Accepted solution]

There probably will be an issue.

To prepare, I would have copies of the cancelled checks/proof of payments on file to show IRS when they send a letter.

[IRonMaN]

Flip a coin as to whether or not there will be an issue.  Since her Social Security number is on the estimates, a reasonable thinking person would think they would be credited correctly.  But since we all know that the IRS doesn't always have reasonable thinking people or computers, I would follow Susan's advice.

[rbynaker]

From what I've heard, yes, there will be a problem.  But it's fixed with a phone call.  Well, maybe.  It probably depends on who answers the phone.  It can be as easy as "hey IRS person, can you please move the payments made under SSN xxx to the MFJ tax return filed with spouse SSN xxx?"  YMMV.

I've also had problems with VA doing the same thing.  That was also fixed with a phone call.  No idea about PA.

I think this wasn't typically an IRS problem pre-COVID but when Congress started throwing money at people the IRS had to keep the EIP payments with the SSN because they didn't know what sort of return was going to be filed.  In doing so I think they lost the ability to automatically find spousal ES payments even though the spouse's SSN is on the joint return.  They may find it again in the future but I'm not holding my breath.  For now I would expect a problem.

[BobKamman]

The known issues are when joint payments are made and then separate returns are filed.  It's easy to program, "check for payments made with either number."  Hard to program, "check to see if amount claimed on separate return is same as, less than, or more than amount actually paid by both spouses, on one or the other account or jointly."  

Will there be an issue if the government shuts down next week and doesn't open until after next April 15?  Is there a charming way to ask, don't you have anything else to worry about?  

[PATAX]

@BobKamman I said joint return so you need to learn how to read. And yes I have other things to worry about too. But this client and his wife just called me. And I'm not bragging but if this guy went somewhere else they would probably charge him more than what you make all tax season. But don't take it the wrong way, if there is a Charming way to say that.😉😁

[BobKamman]

@PATAX You said joint return but I know what the others who tried to answer your question were basing their conjecture on.  Because I'm a mind reader. Aren't you?  I thought it was a requirement here.  

[Terry53029]

@BobKamman The only mind readers here are the ones who took @IRonMaN mind reading classes. 😁

[IRonMaN]

If Intuit hadn't stopped funding the Intuit Intuitive University for the Non-Gifted, we might have more graduates out there today.  But I knew they were going to do that. 

[BobKamman]

@Terry53029  But I did take the @IRonMaN course.  Signed up through the Intuit Select Pro Staffing Outsourcing program.  What I thought was unusual was he wanted to be paid either in cash, or in lutefisk gift certificates.  

[IRonMaN]

Why is that unusual?  It isn't taxable if paid in those forms of payment.  At least that is what my barber told me.

[Accountant-Man]

Who knows? The first year of my marriage, when my wife was entered in the Spouse's box, she received a letter asking when she was going to file.

They figured it out.

38 years later it is still working.

[jritchie]

The issue I have experienced is the lag time between the SS Administration updating the married name of the newly married wife.  They periodically give the IRS a file to update the IRS records with.  So waiting for the IRS and the SS Administration to sync up their details can take a couple tax return cycles, it is all about timing.   The newly married name change not in the IRS records will cause an E-file to reject in ProSeries.  So watch out for the last name change as a potential issue too. 

As for payments made by unmarried people under their own SS#'s, who will file a MFJ return, I agree - you'd think that'd be a simple 'let's match SS#'s and payments to the right return", but you may have to make a phone call to get that to happen. 

[PATAX]

@jritchie yeah efile was supposed to be so great remember? When it was voluntary they could never get over 50% of the returns to be e-filed. They had to Mandate efiling to get over 80%. At a recent webinar that I attended, the instructor said that they plan on all forms to be electronically filed within the next 5 years. I guess that includes all informational returns and payroll tax returns. Can't wait for that from The Nicola Tesla juniors and Albert Einstein juniors.

[PATAX]

Thank you to my good friend and knowledgeable colleague, a retired IRS agent, who I appreciate his help. He said to attach a statement to the front of the form 1040, and list all the estimated payments made by each spouse and the date and amount of each payment and the service center where paid, and each payment identified by the social security number and the name of the payer.

[BobKamman]

Agents do field audits of big businesses.  They have nothing to do with processing returns.  Taxpayer service representative, perhaps?  He must have retired 20 years ago, when paper returns ruled.  How do you attach something to an e-filed 1040?  That anyone at IRS will see, at least.  

[PATAX]

@BobKamman for your information the return is paper filed because this is what the client wants. My colleague also knows more about taxes than some could ever wish to know.😉🤔🤓

[BobKamman]

Many former IRS employees, myself included, know more about taxes than others could ever wish to know.  Most of us know that even face sheets to paper returns are ignored.  If there is a balance due on the return, it doesn't even get mailed to an IRS service center, it goes to a private lockbox.  I think we have cleared that up, recently.  I'm just saying that "agent" is a term of art, not synonymous with "anyone who used to collect an IRS paycheck."