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A trick that worked for me when I had this issue - try entering your AGI without any cents, just the whole dollar amount. Sometimes the system gets tripped up with decimal places. Also, make sure you're using the AGI from your ORIGINAL filed return, not an amended one if you filed a 1040X later.
What if I filed in a different state last year? Does that affect the AGI I should be using for verification?
Your federal AGI is what matters for IRS verification, regardless of which state you filed in last year. The state you lived in doesn't change your federal AGI number. Your AGI is on line 11 of your 2021 Form 1040, and that's the number you should use for verification even if you moved to a different state.
I had the same problem and tried calling the IRS but was on hold for like 2 hours and then got disconnected!!! So frustrating. What finally worked for me was requesting a tax transcript from the IRS website and using the AGI shown there. Sometimes the AGI on your tax return copy isn't the same as what the IRS has on file if there were any adjustments made.
How long did it take to get the transcript? I need to file ASAP and don't have time to wait for mail.
Has anyone tried the IRS Direct File pilot program? I heard they're expanding it for 2025 and it's completely free with no income limits. Curious if it's user friendly or if it's basically just like using the forms directly.
I was in one of the test states last year. It's pretty basic but works fine for simple returns. The interface is clean but there's minimal guidance - it basically asks you questions and fills in the forms. No fancy explanations or hand-holding like commercial software. The big limitation is it doesn't support all tax situations yet. I couldn't use it because I had HSA contributions. But if you have W-2 income, some 1099 interest, and standard deduction, it works perfectly fine. And you can't beat the price!
One thing to consider - sometimes the paid versions DO get you more money back if your situation is complicated. I switched from TurboTax to H&R Block last year and got an extra $720 back because their question sequence helped me realize I qualified for the Lifetime Learning Credit that TurboTax somehow missed. So maybe try running your info through a couple different free options before filing?
I've had the opposite experience. I did a test last year and entered identical info in TurboTax, H&R Block and FreeTaxUSA. All three gave me exactly the same refund amount. The difference was TurboTax wanted $120, H&R Block wanted $75, and FreeTaxUSA only charged $15 for state filing (federal was free). Tax math is tax math - a deduction or credit works the same way regardless of which software you use.
Just adding another perspective here - I'm a payroll manager (not tax advice!) and see this confusion often. The Annual Lease Value is determined by the IRS based on the FMV (Fair Market Value) of the vehicle. There's an actual table in IRS Pub 15-B that converts the vehicle's value to an ALV. For example, a $30,000 car might have an ALV of around $8,250 according to the table. If your personal use is 20%, then $1,650 of that ALV is considered taxable income to you. Your company should then withhold income tax, Social Security, and Medicare taxes on that $1,650 - NOT charge you $1,650 directly. If your deductions seem too high, ask your payroll department for a written explanation of the calculation. Sometimes companies make mistakes, especially if they don't handle car benefits often.
Do you know if there's a minimum amount of business use required for a company car? My manager told me I need to have at least 50% business miles or they'll take the car away, but I've never seen that in writing anywhere.
There's no specific IRS requirement for a minimum percentage of business use to qualify as a company car. That's likely a company policy rather than a tax rule. Many companies do set their own internal thresholds (commonly 50%) to ensure the vehicles are primarily for business purposes, but this varies by employer. What does matter for tax purposes is which valuation method is used. For example, if your company wants to use the cents-per-mile rule instead of the Annual Lease Value method, there are specific requirements about business use and the vehicle's value. But for the standard ALV method, there's no minimum business use percentage required by the IRS.
Has anyone ever successfully disputed their company's valuation of the car? My employer is using an ALV that seems WAY higher than what the car is actually worth. It's a 2021 Camry but they've valued it like it's a luxury car.
I challenged mine last year! I looked up the MSRP of my exact vehicle model and trim level, then printed out the IRS ALV table from Publication 15-B and showed HR how they were using the wrong value range. They adjusted it and credited back the difference. The key is having documentation to prove the correct fair market value.
Some advice from someone who's been through this - check your pay stubs carefully! Last year my employer accidentally entered my withholding as "0" dependents instead of "2" and it took me three months to notice. The extra withholding added up to almost $2,400 before I caught it!! I got it all back on my tax return, but that meant I was essentially giving the government an interest-free loan of my money for months. Could have used that cash for my car payment instead of waiting.
Some people do intentionally overwithhold as a form of "forced savings" since they know they'll get a big refund at tax time. It can work as a psychological trick if you struggle to save money otherwise. The downside is that you're letting the government hold your money interest-free when it could be working for you throughout the year - paying down debt, earning interest, or covering necessary expenses. If you have the discipline, it's almost always better financially to have the correct withholding amount and set up automatic transfers to a savings account if you want to save.
dont worry about it too much this happened to me last year. my company suddenly doubled my withholding for like 3 paychecks. turned out someone in HR entered something wrong in the system. i did get all the extra $$ back on my refund but it was annoying to wait.
Sarah Ali
OP, one other thing to check that no one's mentioned yet - look at line 6 of Form 1040X (if an amended return was filed). That line asks about the method used to calculate taxes. Sometimes if this isn't filled out correctly, it can cause major calculation issues. Also, any time the IRS mentions "additional tax assessed" with no clear explanation, double-check that no one filed a return using your SSN. My cousin had this happen and it was a nightmare to straighten out.
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Connor Richards
ā¢Thanks for this suggestion! I don't *think* I filed an amended return (unless the tax software did something automatically I wasn't aware of). But the identity theft angle is concerning me now. If someone else filed using my SSN, how would I even know? Would it show up clearly on my transcript or would it be hard to spot?
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Sarah Ali
ā¢If someone filed using your SSN, you would typically see some red flags on your transcript. Look for any entries showing two tax returns processed or unusual refund amounts that don't match what you received. The transcript might show codes like "duplicate filing" or "potential identity theft case." Another sign would be if your transcript shows income amounts significantly higher than what you actually earned. In most cases of tax identity theft, the fraudulent return is filed early to claim a refund before the legitimate taxpayer files. If you suspect identity theft might be involved, you should contact the IRS Identity Protection Specialized Unit at 800-908-4490 right away. They have special procedures for these cases that are separate from the normal assessment dispute process.
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Ryan Vasquez
Just went through this exact situation! Call the IRS (plan to be on hold forever) and specifically ask for a "fully detailed explanation of the additional assessment" - it's different from just asking why you owe money. They can generate a document that breaks down exactly where the tax came from. In my case, it turned out to be some stock sales where the brokerage reported proceeds but no basis to the IRS. I had to fax in documentation showing what I paid for those stocks originally. Super annoying but fixable!
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Avery Saint
ā¢How long did it take to get resolved after you sent in the documentation? I'm in a similar situation and trying to figure out if I should just pay it to stop the interest from accumulating or wait for them to process my documentation.
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