So my return and not filling out line1h was wrong, as you mentioned i should expect irs to send a letter? The pretax excess of 7.3k should have been added to line 1-h?
I was wondering since IRS knows taxpayer made excess Roth/401k contribution from W-2, why wouldn't they flag or penalize the return when one files without adding amount on Line-1h to account for that excess?
they already know it the 22.5k limit has been exceeded this year and they don't see any 1099-R from the taxpayer, why would they still leave it up to the taxpayer to fix it?
If they assign task of fixing to the taxpayer without really issuing any penalties, then that sounds like a loophole than a requirement or else they'd have enforced it through penalties.
That is not how IRS works. They do not flag such issues on the fly.
I am talking from experience, although situation was a slightly different. I was rolling tIRA into 401k, very basic process, received 1099-R from Fidelity. 401k did not send any tax documents confirming rollover as would IRA custodian do. So for IRS it all looked as I just cashed out tIRA. They accepted return with no issues, sent refund, and then about 6 month later I received letter stating that I owe additional taxes, 10% penalty for early withdrawal , underpayment penalty and interest. I sent them copy of 401k statement confirming rollover, and that was it.
So in your case I would expect similar letter from the IRS where they will fix your return at the time of processing and ask to pay extra if they will catch it at that time, or send “audit” letter later when I assume they run all the data through some validation and flag for audit. In my case it was second, return was processed but later flagged for “audit”.
Statistics: Posted by bogle005 — Fri Oct 18, 2024 12:13 am — Replies 62 — Views 2452