those I know. Dealt with some big names - no I won’t mention
can you tell me if it was mob related or not?
some mob.
meatpacking industry
when he retired he became a forensic accountant. Helping people in tax trouble.
I got to meet a few celebrities, go to some concerts
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The EITC can be pretty rich (as a percentage of total income anyway) and I have been cautioned that the IRS gets quite suspicious when someone’s Schedule C hits either the lower or the upper bound for the max EITC.
For example for 2021 if you are a Head Of Household with 2 qualifying children, you get the maximum EITC of $5,980 when your earned income is between $14,950 and $25,500. If your income is less than $14,950 you are on the phase-in and will get less and if it’s more than $25,500 you are on the phase-out and will get less.
The IRS is apparently very suspicious when they see Schedule C’s (where self-employment income is reported) for $14,955 or $25,495 for Heads of Households with 2 kids. Seems to them like maybe you’re inflating or understating your business income to get to the max EITC.
I’m told that business income of $21,000 or $7,000 or $32,000 is far less suspicious / less subject to scrutiny. 
Definitely true. It would be interesting to see that broken down by presence of a Schedule C, E, or F. And also to include whether the 1065s and 1120s of the rich folks get are audited. Because if I have a small biz with $10,000 of income that’s probably on my personal return and questioning my business income means reviewing my personal return. But if I have $500,000 of income it’s probably on a 1065 or 1120. So reviewing that business income is NOT looking at my personal return and perhaps not counted in that chart.
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Our daughter got her 2021 refund, was told no 2020 because she got stimulus (6 kids); still awaiting 2019 refund.
Having gotten the stimulus checks doesn’t necessarily mean you don’t get a refund, although they did front some of the money that otherwise might take the form of a refund temporarily (sadly it didn’t get renewed).
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Yeah, no 2020 refund due to getting stimulus makes no sense.
If she’d already received all the stimulus she was entitled to then that simply means that her Rebate Recovery Credit was $0. But any other refund stemming from normal stuff that generates refunds (too much withholdings from your job, Earned Income Credit, Additional Child Tax Credit. high earner who switch jobs mid-year & overpaid Social Security tax, etc.) was still in play. In addition some special treats just for 2020 like getting the first $10,200 of unemployment tax free.
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I have a letter in the mail from the IRS but I have no idea why. Could be boring, I’m expecting something bad though. Can’t think of what I’d’ve done wrong… I might have missed a 1099-INT?
Come on mail guy, hurry up…
If it’s something mundane like $37 of missed interest income then they’ll either reduce your refund or issue a bill for the additional taxes plus a bit of interest. If it’s a small amount they probably won’t bother with penalties as long as you just pay the additional straight away.
Occasionally it’s something in your favor.
If they changed your taxes and you disagree with the change and you self-prepared, shoot me a PM if you want.
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Ended up being that they’re paying us back a few hundred. I have no earthly idea, perhaps I put in a “1000” instead of “0100” or similar.
Still weird to me they can come back and say, “Yeah we knew this the whole time but you had to deal with it anyway.” I won’t complain anyhow.
By “this whole time” do you mean from the time they processed your original return and either accepted your payment or issued your refund as appropriate until now?
I think the way it works is that there’s a first pass where they essentially just ensure that you didn’t make any arithmetic errors and carried stuff through from one form to the next appropriately and your return is, within an acceptable tolerance, internally consistent / plausibly correct. They also check to ensure that you didn’t claim a dependent that someone else already claimed. If you’re due a refund they make sure there’s not a lien on it for back child support, back taxes, or some other judgment that’s been appropriately filed with the IRS, and that’s about it. They process the payment or refund subject to just those very basic checks. Software does this pretty much as soon as the return is filed, or if you paper file then an IRS employee inputs your return into their software for you.
Later different software compares your return against your transcript. These transcripts aren’t even available until mid-to-late May, so that’s the earliest this step can possibly happen, and they go in batches in the approximate order that the returns were initially processed. Your transcript shows all of your W-2s, 1099s, 1098s, etc. If there are discrepancies they will correct them at that time. It sounds like that’s probably what you’re looking at.
Then certain returns get further scrutiny, which is approximately where humans step in in a more meaningful way.
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Oh, part of the first pass is also checking it against your withholdings & payments.
And for 2020 & 2021 returns if you claim the Rebate Recovery Credit then they check that what you claim they already sent you matches what they think they already sent you. (If you say you didn’t get the stimulus at all and they think you did, they will definitely catch that in the first pass.)
That’s checking your return against your account transcript, which is constantly getting updated. That’s part of the first pass.
Checking your return against your wage & income transcript (W-2’s, 1099s, etc) is the second pass that starts in mid-May.
So previously I worked in NYC and lived in NJ so I had to file both a NY and NJ state tax return.
Come next tax season I’ll have changed jobs to a place where my “work location” is my house in NJ and I work remote, does that mean I don’t have to file a non-NJ tax return?
If you lived and worked in New Jersey all year then just federal & NJ should be good.
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Awesome! I’ve had to file at least 2 state tax returns (and for a few years 3) since I graduated college. This will be awesome to just have the one.
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That’s assuming that your W-2 correctly reflects this of course.
If your employer believes you’re living in Michigan or Virginia or something and withholding taxes to those states then you’ve got an issue.
More common when people move and don’t tell their employer. I see it with the VITA folks where the kid moves out of their parents’ house into a lower taxing area, but continues to use parents address. Then employer screws up the W-2 because they didn’t know (kid’s fault, but employer must correct). Then it’s a hassle.
Same situation, different states, I will be only filing in my residence state
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Makes sense, yeah it’s all set up as NJ which at the beginning I was a bit unsure about because of the intention to occasionally visit the NYC office, but something like 10-20% of my working time.
I did have a lovely time with my previous employer because they had me withholding taxes for the city of NY despite living (and not moving) in NJ before during and after working there. I thought HR had sorted it after the first year until I got a letter this past tax season from the state of NY saying I’d done my taxes wrong and owed them a couple thousand dollars. Was a headache to actually get it sorted but fortunately that’s done now…
I recall moving to/from Washington state which has no income tax. It was so nice to finish the federal return and be done! But then a drag to move to a taxing state and have to add it back to the mix.
In Ohio you might have to pay federal, state, municipal, and school district income tax all if you work from your home. And if you and/or your spouse work in a different municipality than where you live you get to do multiple municipal returns! Not to mention the possibility of multiple state returns.