If you make quarterly estimated payments, the fourth payment for 2012 is due today, January 15, 2013. If you need a voucher and instructions for filing estimated tax payments they can be downloaded from the IRS website here. Filing estimated tax payments helps you avoid those late payment penalties and interest that are calculated when you file your return.
Have you ever gotten one of those ominous looking envelopes from the IRS? Even as a seasoned CPA when one of those IRS envelopes shows up at my front door I feel my pulse quicken. And if you don’t know what I am talking about, consider yourself lucky!
I have recently seen a shocking number of these “CP2000 notices,” indicating some kind of error that is resulting in you needing to make an additional payment. Sometimes it works out that you get an extra refund, but not often! What happens is this:
- You submit your tax return to the IRS, the good tax-paying citizen that you are, usually in an electronic format.
- The IRS takes the information you submit.
- The IRS takes the information the payers submit. This includes W-2, 1099-MISC, 1099-INT, 1099-DIV, etc.
- The IRS compares the two sets of information.
- Something does not match properly and the CP2000 is sent to you.
This is where it is great to have a CPA that you work with because we are unphased by these letters. Often I find the IRS is wrong. Sometimes it is so wrong that it is clear that no human actually looked at the report before sticking it in the mail. Most times I can write a polite letter to the IRS and have the matter resolved quickly.
The lessons here? First- DON’T PANICK! Second- don’t ignore the IRS letter- give it to your CPA. Third- if you dont’ have a CPA, get one!