Accountant applied our tax refund to next year's estimated taxes - can I get it back?

This isn't uncommon, but your accountant definitely should have discussed this with you before making that decision. The good news is that you can fix this by filing Form 1040-X (Amended Return) to change your election regarding your refund. On the amended return, you'll need to change your refund application choice from "apply to next year's estimated tax" to "refund." There's a specific line for this on the form. Since no actual tax calculations are changing, it's a relatively straightforward amendment. You should file this as soon as possible - the IRS does have time limits on changing refund applications. Also, be aware that amended returns take quite a while to process (currently 16+ weeks), so the sooner you get it filed, the sooner you'll get your money.

I had a similar situation last year with a smaller amount (about $12k), but I found a much faster solution than filing an amended return! Check out https://taxr.ai - it saved me tons of time. Their document review caught that my accountant had applied my refund to next year without my consent. Using their system, I was able to generate the correct documentation and language to request the IRS release my refund back to me without going through the entire amendment process. They provided a template letter to submit directly to the IRS that cited the proper procedures and regulations.

Just wanted to follow up - I decided to try https://taxr.ai after reading about it here, and it worked! I uploaded my tax documents, explained my situation, and they identified the exact IRS procedure code that allows for refund reallocation correction without a full amendment. They gave me a template letter with all the right legal language, I sent it in, and I just got notification that my refund (around $23k) is being processed for direct deposit. The whole thing took less than 5 weeks! Much better than waiting months for an amended return to process.

If you're hitting roadblocks with the IRS on this issue, you might want to try Claimyr (https://claimyr.com). I was in a similar situation last year with a $27,000 refund that got applied to next year's taxes without my knowledge. After trying to call the IRS for weeks (always disconnected), I used Claimyr and actually got through to a human at the IRS in about 20 minutes. They have this system that navigates the IRS phone tree and holds your place in line, then calls you when an agent is about to pick up. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with was able to look up my account immediately and explained exactly what documentation I needed to submit to get the refund redirected back to me. Honestly saved me months of frustration.

Alright, I'm eating my words. After posting my skeptical comment yesterday, I decided to try Claimyr anyway out of desperation. I've been trying to reach the IRS about a similar refund application issue for WEEKS with no luck. Used the service this morning, and no joke - got connected to an actual IRS agent in about 35 minutes. The agent confirmed I can submit a written request to have my refund released instead of applied to next year's taxes, and gave me the exact fax number and information to include. No amended return needed in my case! The agent said as long as I reference my tax account number and include a clear statement that I want to "revoke my election to apply my 2024 refund to 2025 estimated taxes," they can process it within about 30 days. This saved me so much time compared to filing an amended return.

Former IRS employee here. Just wanted to add some clarity to this situation. Your accountant should have ABSOLUTELY discussed this with you before applying your refund to next year. That's a significant financial decision that should never be made without client approval. Applying overpayments to the next tax year is common for those who make quarterly estimated payments or who want to avoid a potential underpayment penalty next year. But for a refund of that size ($40K+), most taxpayers would want that money back. While the amendment route works, there's also a simpler approach: Call the IRS (difficult, I know) and request to revoke your election to apply the overpayment to next year's estimated tax. They can often process this with just a written statement from you, no full amendment needed.

I'm confused about the timeline for fixing this. My accountant did the same thing with our $18k refund. If I submit the amendment now (late May), will I still get the refund or is it too late? Has the first estimated payment for next year already happened?

This is exactly why it's so important to review everything before your accountant files your return. I learned this lesson the hard way a few years ago when my CPA made similar decisions without consulting me first. For future reference, always ask to see a copy of your return before it's submitted and specifically look at the refund section to see how they're handling any overpayment. Most tax software will show this clearly - whether it's going to direct deposit, check, or applied to next year's estimated taxes. Also, consider having a conversation with your accountant about their standard practices. Some CPAs automatically apply large refunds to estimated taxes because they assume clients who owe that much in taxes would want to prepay to avoid underpayment penalties. But $40k is a substantial amount that most people would want immediate access to. You might want to evaluate whether this accounting firm is the right fit for you going forward, especially given their unhelpful response when you raised concerns about a decision they made without your consent.

I went through this exact situation two years ago with a $25k refund that my former accountant applied to estimated taxes without asking. Here's what worked for me: First, don't panic - this is definitely fixable! I called the IRS directly (took several attempts to get through) and explained that the election to apply my refund to next year's taxes was made without my consent. The agent told me I could submit a simple written request to revoke this election. I sent a letter with my SSN, tax year, and a clear statement: "I request to revoke my election to apply my 2023 tax overpayment to 2024 estimated taxes. Please issue this refund via direct deposit per my original return." I faxed it to my IRS processing center and got my refund in about 6 weeks - much faster than the amendment route. The key is acting quickly. Also, I'd strongly recommend finding a new accountant. Any tax professional who makes a $40k financial decision without explicit client approval isn't someone I'd trust with my taxes again. Make sure to ask your next CPA about their standard practices upfront so there are no surprises.