Did TurboTax Mis-calculate My Recovery Rebate Credit?
It never makes me feel good when receiving a letter from the IRS because most of the time, it’s not going to be a good news (luckily I haven’t got into any trouble with the IRS so far). So when I saw the letter from IRS in my mailbox today, I was first kind of a little nervous when opening up the envelop, then a little relieved once I finished with the letter.
The letter was a notice to let us know that we now owe the IRS $485.07 because
We changed the amount of the recovery rebate credit you claimed on Line 70 of your Form 1040 because the amount entered was computed incorrectly.
While it isn’t as bad as an audit letter, it still made me feel that I didn’t something wrong with our tax return, whether it’s my fault or not. So I went back to our 2008 tax form and found on Line 70 “Recovery rebate credit“, the amount entered was $483. The problem is I didn’t enter that amount myself. It was TurboTax, the tax software I used to prepare our tax returns, which determined the amount of rebate credit we should get for us What is more frustrating is that I can’t seem to figure out how $483 is calculated even after going through related worksheets. Actually, the only information I can find that’s related to the recovery rebate credit in the return was on the Federal Information Worksheet, which has the following two lines under Recovery Rebate Credit Information:
- Estimated economic stimulus rebate calculated on your 2007 TurboTax return: $384;
- Economic stimulus payment received (before offset): $201;
The difference of $183 between the actual amount of economic stimulus payemnt we received and the amount TurboTax calculated is the penalty for not paying enough estimated taxes in 2007. Maybe I made a mistake about “before offset”, but somehow the numbers just don’t add up: How exactly is the $483 credit calculated anyway?
What should I do next? Pay the amount we are told we owe? Or disput the correction?
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