prepaid taxes

[Possi]

In all my life I have never had a client actually go online and pay the tax liability before they have signed/picked up so that I can actually FILE the tax return. 

The receipt he sent me says "Reason; Proposed Tax assessment" with 1040 and 2020 tax year.

It's all good, but do I actually report the payment on the tax return when I submit it? 

I don't think I am supposed to do that, because I think I need to SHOW the tax assessment in order for this to wash out properly.

[Gail in Virginia]

Interesting.  I have never had that either - I am more likely to have them come to do next year's return without having paid the year before.  I would handle it the way you propose.  Either way, it should come out the same since the year paid is the same as the year filed.  I just don't see a line on the return for paid prior to filing. 

[RitaB]

I would treat it like a 1040-V payment.  I would not change the return.

[schirallicpa]

Maybe put it as an estimated payment and show the date paid. 

[jasdlm]

I hope I'm wrong, but I think you're going to have to call with a 2848 and permission to move the payment.  I've had numerous examples of clients getting dunning notices while there's a payment 'out there' hanging in the incorrect spot.  I've tried moving them before with simply the preparer authorization on the return - total no go.

I'd be interested to know if anyone has had better luck than I have in this arena.  I was encouraged by the thread indicating that many of you had been able to move estimated payments erroneously made to the correct year.

This is from the IRS website (payment option choices):  The purple bit is what makes me think they'll leave it hanging out there waiting and dun your client for the balance due.  Eager to hear other thoughts.

*********************************************

Proposed tax assessment
(e.g. CP 2000 or a Notice of Deficiency)

1040, 1040A, 1040EZ

Health care (Form 1040)

Current calendar year or prior years going back up to 20 years

Make a full or initial payment for a proposed amount.

Payments of this type may post in advance of the actual tax assessment.

If you have an installment agreement, select Installment Agreement as the reason for payment.

[JohnH]

That’s pretty creative. There’s no limit to the ability of some clients to gum up the works, is there?  

[Possi]

18 hours ago, JohnH said:

That’s pretty creative. There’s no limit to the ability of some clients to gum up the works, is there?  

Thank goodness the amount didn't change for any reason. I understand him, though. A Seal, he was home briefly and wanted to tie up all his business before leaving again. But, hey, sign your tax return.

In the big scheme of life, HIS life, this is not so big a deal. 

We all, in this world, could use some prospective from time to time. I got a dose of mine. 

[Possi]

On 3/29/2021 at 5:34 PM, jasdlm said:

I hope I'm wrong, but I think you're going to have to call with a 2848 and permission to move the payment.  I've had numerous examples of clients getting dunning notices while there's a payment 'out there' hanging in the incorrect spot.  I've tried moving them before with simply the preparer authorization on the return - total no go.

I'd be interested to know if anyone has had better luck than I have in this arena.  I was encouraged by the thread indicating that many of you had been able to move estimated payments erroneously made to the correct year.

This is from the IRS website (payment option choices):  The purple bit is what makes me think they'll leave it hanging out there waiting and dun your client for the balance due.  Eager to hear other thoughts.

*********************************************

Proposed tax assessment
(e.g. CP 2000 or a Notice of Deficiency)

1040, 1040A, 1040EZ

Health care (Form 1040)

Current calendar year or prior years going back up to 20 years

Make a full or initial payment for a proposed amount.

Payments of this type may post in advance of the actual tax assessment.

If you have an installment agreement, select Installment Agreement as the reason for payment.

I'm not going to sweat it. I'm sure it will wash itself out when we finally file on Thursday. If there's a problem, I'll let you know.