Forgot to include one 1099-DIV in my tax filing - what to do?

File an adjustment. It is better than them discovering the error themselves and charging you penalty and interest.

You'll need a 1040X.

You will have to pay interest from the due date of the return to the date of payment, even with an amended return (1040X). However, there won't be any penalty as long as the original return was timely. And the longer you wait, the longer the interest clock has to run.

Katie in San Diego

Is it possible to pay them the amount you will owe them, ahead of filing the return to avoid interest/penalties?

Steve

Interest is charged from the original filing date until the payment is received. Penalties can sometimes be avoided or abated.

Make that Original Due Date, not filing date.

You don't know how much tax you owe until you do the amended return. If you pay that amount with the amended return that stops the interest. They'll then bill for the interest that had accrued, and if you pay that on receipt there will be no further interest.

-------------- Phil Marti, VITA Volunteer Clarksburg, MD

No, you don't, but you can estimate (say, marginal tax rate times newly identified income). If one's return is complex and one uses a tax preparer with finite bandwidth, it can take a while for a low-priority amended return to actually be created...

Steve

As others have answered, the usual cure is to file a 1040x i.e. amended return.

So the first thing to do is to prepare one, include the 1,000$ with dividends as see what effect it produces. If added tax is calculated, then file it and send the extra amount due plus about 1/2 per cent for interest.

However.... if your tax rate is down in the 15% or lower rate, those dividends might just escape any added tax due to the largess of our congress for 2008 and 2009.

And as the speaker at recent Carolinas seminar is fond of saying, "I LIKE that."

ChEAr$, Harlan Lunsford, EA n LA

But if the payment is posted as a TC 670 Subsequent Payment, and there is no amended return or other action to freeze a refund, the payment will likely be refunded in short order.

[...]

And, since no one else has mentioned it, don't forget your state will want an amended return also (unless you happen to live in a state with no personal income tax). States do not necessarily conform to the federal capital gains rate that Harlan mentions.

-Mark Bole

Okay, now we have two conflicting answers to my original question. Can you, or can't you, prepay the amount you think you owe, ahead of amending the return?

Steve

Sounds like you can, but it might get sent back to you before it does any good.

Suppose we were talking about a refund, rather than a balance due -- then what you are asking about is just the mirror image of the government's situation. In other words, even if you can estimate right now a refund you will be due when you file an amended return, you will earn interest (instead of paying interest) on the amount until you actually file such an amendment -- the IRS can't make an advance payment of your refund to stop the interest clock.

I'm guessing the IRS doesn't want to get involved with paying and charging interest beyond what's mandated by law, and they don't want to hold your money in escrow while you take up to three more years to get around to filing the paperwork.

-Mark Bole

There are no absolutes in the way your payment will be handled, but here are some options:

1) Send your payment with a Form 1040-V Payment Voucher which may cause the payment to be posted as a TC 610 (Remittance with Return), and may keep it in place until your amended return is processed. 2) Make your payment at a local IRS office and request that a TC 570 (Additional Liability Pending/Credit Hold) be posted to your account. 3) If your payment is refunded, and if it comes back to you by check rather than direct deposit, hold/do not cash the check - send it back with your amended return - and you "should" receive credit as of the original date of payment.

Thanks, that makes it much clearer.

Steve

If you over-pay via any of these methods, must the IRS pay you statutory interest on the eventual refund amount from the date you made the over-payment?

-Mark Bole

Assuming the original return was timely filed, guidance in IRM 20

excerpts below, indicates interest would be payable on an overpayment from the date the payment was received to the date the amended return is received.

20.2.4.2 (03-01-2002) Definition of Overpayment

1. An overpayment includes any amount that is:

F. an excess payment of tax, penalty, addition to tax, or interest...

20.2.4.3 (03-01-2002) Availability Dates for Overpayments

1. Payments made after the return due date are available for refund or offset as of the received date of the payment or the delinquent return received date, whichever is later..

20.2.4.7.2.3 (03-01-2002) 45?Day Rule and Amended Returns and Claims, OBRA '93

1. The 45?Day rule was further expanded to include amended returns and claims for credit or refund filed on or after January 1, 1995.

2. When an overpayment results from a claim or amended return and the refund is issued within 45 days of the received date of the processible claim or amended return, no interest is allowed from the received date of the claim/amended return received date. Credit interest is allowed from the credit availability date to the received date of the processible claim/amended return.