Urgent Tax Question ... Or How Screwed Am I?

[dirty ethel rackham]

We have always used turbotax.  I purchase the cd from costco and do my taxes.  Since I have a business, I have to do a schedule C.  Every year, before I electronically file, I print off the entire return.  Then I back everything up, put all the paperwork into a large envelope and file that with all my previous returns.  

 

So, last july/august, I had a catastrophic hard drive failure and a back-up drive failure. (Some of you were gracious enough to try to help me through this problem.)  I knew the hard drive was going so I backed up all my files onto a back up drive (physical drive. )  Then, before taking my computer into a professional to be fixed, I deleted any sensitive files ... like a tax return where SSNs could be seen, thinking I had them backed up and that I had the paper copy.  Well, the physical back-up drive also failed, and my old tax return files went POOF!

 

So, here I am, trying to finish my return tonight before the October 16 extension deadline and everything is going so well.  I had found the 2016 paper file.  When I went to enter last year's data, I found that the program only printed part of the return.  Schedules A and C are missing so I can't enter that data.  

 

I probably wouldn't be sweating it so bad except for the fact that my business tanked and I am taking a loss.  Also, there was a mix up with dh's beneficiary IRA where he didn't get his RMD for last year (broker's mistake, not ours.)  I don't want to get audited.  

 

How bad is this situation?  

[Carol in Cal.]

I'm not a tax expert, but in that situation I would file what I have, and then file an amended return as soon as possible later on.

[HeartString]

Have you checked turbo tax for a copy? I always use the online version so it might be different but they have copies of past years on the website when I log in, I'm pretty sure.

[StephanieZ]

That's a good idea to file what you can, estimate your taxes, pay them (you probably have already), and then amend it ASAP. The IRS doesn't really give a fig about your returns, IME. They just want their money, lol. At the end of the day, when you file the final, accurate return, you shouldn't owe penalties as long as you gave them the right amount of $$ when it was due. Any penalties/interest is generally assessed just on the money that is late. Either way, it's generally proportional . . . So, if you're just short a few hundred bucks, the penalties wouldn't be very much. If you're nervous, just estimate on the high end, and get a refund later. 

 

You should be able to get a copy of your entire tax return from the IRS. I did it decades ago for my dad's tax returns, so I don't know how you'd do it now, but I'm sure there's a way. You might be able to get it really fast electronically now days . . . 

 

 

 

 

[dirty ethel rackham]

I can get a return from the IRS, but the window for getting it electronically has passed.  I have to request a paper copy.  And you know how long that will take, LOL.  Since I never used the online program before ... only my downloaded program, I don't believe my files are kept on their server.  That is why I was so careful about backing them up.  I just chose a lousy back up technology.  

[ILiveInFlipFlops]

I can get a return from the IRS, but the window for getting it electronically has passed.  I have to request a paper copy.  And you know how long that will take, LOL.  Since I never used the online program before ... only my downloaded program, I don't believe my files are kept on their server.  That is why I was so careful about backing them up.  I just chose a lousy back up technology.  

 

You didn't print them out at some point, did you? I always print reference copies of my entire return and all related documents (interest statements, mortgage interest statements, etc.) and file them in our paper files under the year. Any chance you did that and maybe buried it somewhere? 

 

I agree that you're not really in much trouble here at all. It's a hassle, but not much of an actual problem.

 

Good luck!

[Laurie4b]

I would file without taking the deductions that you think you're entitled to but that you can't prove. Then file an amended return. My sister has been audited twice and it is just awful. Costs enormous amounts of time and also money for an accountant. 

[mlktwins]

You didn't print them out at some point, did you? I always print reference copies of my entire return and all related documents (interest statements, mortgage interest statements, etc.) and file them in our paper files under the year. Any chance you did that and maybe buried it somewhere? 

 

I agree that you're not really in much trouble here at all. It's a hassle, but not much of an actual problem.

 

Good luck!

 

She did print it out, but 2 necessary schedules didn't print and she didn't realize it.

[dirty ethel rackham]

I would file without taking the deductions that you think you're entitled to but that you can't prove. Then file an amended return. My sister has been audited twice and it is just awful. Costs enormous amounts of time and also money for an accountant. 

I have all the documentation for the deductions.  I just didn't have anything other than the 1040 form from last year.  As it turns out, I was able to guesstimate the info from schedule C since I had printed a nice P & L statement and put it in the file.  As I put that in, I realized it was only for comparison purposes, not for filing.  I didn't really need the info from Schedule A.  

 

You didn't print them out at some point, did you? I always print reference copies of my entire return and all related documents (interest statements, mortgage interest statements, etc.) and file them in our paper files under the year. Any chance you did that and maybe buried it somewhere? 

 

I agree that you're not really in much trouble here at all. It's a hassle, but not much of an actual problem.

 

Good luck!

I did print them out.  And I printed the confirmation that they were received.  And I know I printed it out again at one point because we needed it for some refinance documentation for a home equity line of credit that we were rolling over.  But I can't find that copy, nor can I find those other schedules.  Those ones didn't make it into the envelope.  

 

But, I am done.  They have been filed.  I even did the research I needed to do in order to beg for a waiver for not getting that RMD for dh's beneficiary IRA.  It was a clerical error on the part of the financial guy, but we get to pay the price.  

[ILiveInFlipFlops]

She did print it out, but 2 necessary schedules didn't print and she didn't realize it.

 

 

I have all the documentation for the deductions.  I just didn't have anything other than the 1040 form from last year.  As it turns out, I was able to guesstimate the info from schedule C since I had printed a nice P & L statement and put it in the file.  As I put that in, I realized it was only for comparison purposes, not for filing.  I didn't really need the info from Schedule A.  

 

I did print them out.  And I printed the confirmation that they were received.  And I know I printed it out again at one point because we needed it for some refinance documentation for a home equity line of credit that we were rolling over.  But I can't find that copy, nor can I find those other schedules.  Those ones didn't make it into the envelope.  

 

But, I am done.  They have been filed.  I even did the research I needed to do in order to beg for a waiver for not getting that RMD for dh's beneficiary IRA.  It was a clerical error on the part of the financial guy, but we get to pay the price.  

 

Thank you! I saw that initially and then it fell out of my swiss cheese brain. 

 

Ellen, I'm glad it's done. Taxes are a special kind of torture, even with TurboTax!

Edited October 17, 2017 by ILiveInFlipFlops

[Lanny]

Sorry...  I switched from TaxAct (years ago I downloaded their Software onto a PC, then  I went to their Online web site).  First free and then I paid for the Premium  version for a number of years.  Then, They raised the price for the Premium so much that I looked elsewhere.  TaxAct was always very good when I used it.

 

I found FreeTaxUSA.com   The past 2 tax years, I have filed my Federal Tax return, which includes, like your return, a Schedule C, free. I think if you need to file a State return it is another 10 or 15 dollars, not sure of the exact cost.

 

Based on my experience, I would go to FreeTaxUSA.com and start filling in your information.

 

Both of those companies eFile and I haven't had any problems.

 

Many people are afraid to have their confidential information in the Cloud, and that's readily understandable, but you have experienced the disaster of what can go wrong, locally.  

 

Good luck!

Edited October 17, 2017 by Lanny

[dirty ethel rackham]

Sorry... I switched from TaxAct (years ago I downloaded their Software onto a PC, then I went to their Online web site). First free and then I paid for the Premium version for a number of years. Then, They raised the price for the Premium so much that I looked elsewhere. TaxAct was always very good when I used it.

 

I found FreeTaxUSA.com The past 2 tax years, I have filed my Federal Tax return, which includes, like your return, a Schedule C, free. I think if you need to file a State return it is another 10 or 15 dollars, not sure of the exact cost.

 

Based on my experience, I would go to FreeTaxUSA.com and start filling in your information.

 

Both of those companies eFile and I haven't had any problems.

 

Many people are afraid to have their confidential information in the Cloud, and that's readily understandable, but you have experienced the disaster of what can go wrong, locally.

 

Good luck!

The free sites don't have everything we need. Many of the other brands have been missing curtail information. All of this would have been so easy if I hadn't lost last year's tax file in the computer crash. I'm still in the process of a two stage backup ... physical backup and the cloud.

 

Sent from my SM-G900T using Tapatalk

[Lanny]

The free sites don't have everything we need. Many of the other brands have been missing curtail information. All of this would have been so easy if I hadn't lost last year's tax file in the computer crash. I'm still in the process of a two stage backup ... physical backup and the cloud.

 

Sent from my SM-G900T using Tapatalk

 

Question:  Respectfully:  Are you sure about that?   When I used TaxACT, they said that they had all of the forms one could eFile to the I.R.S., available, free.  

 

Probably that's the same with the FreeTaxUSA I have used for the last 2 tax years.

 

With TurboTax, one is paying A LOT for their Marketing.  When I looked into the possibility of using TurboTax, years ago, because I need to file a Schedule C, it would have cost WAY MORE than TaxACT or another service.  I think it was approximately 7 or 8 times more expensive at that time, because of the Schedule C.

[dirty ethel rackham]

Question:  Respectfully:  Are you sure about that?   When I used TaxACT, they said that they had all of the forms one could eFile to the I.R.S., available, free.  

 

Probably that's the same with the FreeTaxUSA I have used for the last 2 tax years.

 

With TurboTax, one is paying A LOT for their Marketing.  When I looked into the possibility of using TurboTax, years ago, because I need to file a Schedule C, it would have cost WAY MORE than TaxACT or another service.  I think it was approximately 7 or 8 times more expensive at that time, because of the Schedule C.

You know, I am pretty sure, sure enough to be OK with paying more for a tried and true product.  I tried a couple of free sites and other online providers last April.  And I kept running into situations that their system couldn't handle.  That is part of the reason I had to file an extension. Of course they all have the forms.  But, not all were able to electronically file everything I needed.  I'd have to print out the return and send that in, which takes way more time and can be way less accurate.  And many don't have the interview/walk you through it for every situation.  Our taxes aren't terribly complicated, but complicated enough that it is worth it to me to pay for a product that I know will work because I have experience with it. 

 

Is it possible that there is a slightly cheaper option out there? Yeah, sure.  But do I want to spend any more of my time trying them all out only to find out that one of our stickier situations needs a different product.  I already did a few and it was a colossal waste of my time.   This isn't about brand loyalty.  My adult children use the cheap online versions of things because their situations are much more simple.  

[Crimson Wife]

The free sites are great if you have an uncomplicated return but they're useless for complicated situations. We're probably at the point where we really ought to be hiring a CPA rather than TurboTax but DH is Mr. "I've got a MBA in finance and am a Chartered Financial Analyst so I can figure this out with TurboTax's help" :rolleyes: 

[dirty ethel rackham]

The free sites are great if you have an uncomplicated return but they're useless for complicated situations. We're probably at the point where we really ought to be hiring a CPA rather than TurboTax but DH is Mr. "I've got a MBA in finance and am a Chartered Financial Analyst so I can figure this out with TurboTax's help" :rolleyes:

 

Yeah, I am sort of that way.  I don't have a finance degree, but i do have a stubborn ("I majored in math, how hard can taxes be?") streak.  For me, the work is getting all of the data together for my home business, not the taxes themselves.  And I never made enough money for it to be worth hiring a professional bookkeeper to take care of all that.  I keep saying I'll be more organized and and have an easy to use system to keep track of it all.  But I don't.  Since I am closing down my business, next year will be the last year of that nonsense.  But, taxes will get more complicated with dh's looming "retirement" from one job and taking on consulting work.  That is when I say enough and hire the professional.  

[Lanny]

I don't know about TurboTax because I've never used it, but in the back of my head I have that they were hacked and/or had some errors, a few years ago?  That could, honestly, happen to any company.  Even if we did not live overseas, I would much rather eFile my return, than to have it possibly lost or intercepted in the Snail Mail, if I mailed a paper copy to the I.R.S.  And with eFile, when the I.R.S. does the initial processing of the submittal of the return, they scan for obvious errors, before accepting the return.

 

Having used both software I downloaded and installed to my PC, and the online software, I believe the online software is apt to be more up-to-date and have fewer glitches.

 

If TurboTax works for you, go for it. If not, the next step between that and a Tax Attorney, is an I.R.S. Enrolled Agent.  They are "experts" at preparing individual (and possibly corporate?) tax returns. I used an I.R.S. Enrolled Agent 2 or 3 times, when I lived in TX to help me prepare a return with something that was new to me.

Edited October 17, 2017 by Lanny

[RootAnn]

My mom had to beg for the waiver on the RMD a few years ago because my dad died & when things got rolled over, the auto-setup of the RMD didn't automatically happen. No one realized it. My mom just filed the (warning) letter (from the financial place) without reading it. The IRS forgave her for missing it just that once. She paid extra in taxes the next year since she had one full year of RMDs and my dad's rolled over IRA RMD. It was enough to toss her into the next tax bracket up.  :thumbdown:  However, it was cheaper to pay more in taxes the following year than lose half the RMD to the IRS.

 

Glad you got it figured out & done.