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Just got a Federal refund 8x more than my accountant told me to expect

MovieCutter

MovieCutter

macrumors 68040
Original poster
May 3, 2005
3,342
2
Washington, DC
I'm sure it's a mistake, let me just relish in my excitement of getting 8 TIMES more of a federal refund than I was expecting (talking 5 digits more than expected).

Seriously though, has this happened to anyone else? I know I'm supposed to let it sit and wait for a letter from the IRS to explain the discrepancy, but I just ordered a new maxxed out 12-core Mac Pro 30 seconds ago when I found out.....

...no I didn't...

I'm self-employed for the first time in 11 years so I don't know what to expect. Experiences?
 
MovieCutter said:
I'm sure it's a mistake, let me just relish in my excitement of getting 8 TIMES more of a federal refund than I was expecting (talking 5 digits more than expected).

Seriously though, has this happened to anyone else? I know I'm supposed to let it sit and wait for a letter from the IRS to explain the discrepancy, but I just ordered a new maxxed out 12-core Mac Pro 30 seconds ago when I found out.....

...no I didn't...

I'm self-employed for the first time in 11 years so I don't know what to expect. Experiences?
Click to expand...

send some of it to my account
 
MovieCutter said:
I'm sure it's a mistake, let me just relish in my excitement of getting 8 TIMES more of a federal refund than I was expecting (talking 5 digits more than expected).

Seriously though, has this happened to anyone else? I know I'm supposed to let it sit and wait for a letter from the IRS to explain the discrepancy, but I just ordered a new maxxed out 12-core Mac Pro 30 seconds ago when I found out.....

...no I didn't...

I'm self-employed for the first time in 11 years so I don't know what to expect. Experiences?
Click to expand...

This might be right. Seriously.

If you are self-employed, especially if going off of a home-based business, there are a lot more credits and deductions you can take outside of a simple W-2 or 1099-type return. For example, your home office, home improvements, phone calls for work, mileage, tolls, supplies.. Those plus a bit more are all expenses that can be written off (read: added as expenses on your return form) that wouldn't be able to be added on a normal 1040A or 1040-EZ form.

YMMV, and your CPA may have done a really good job on your taxes, so this may be right.. definitely speak to your accountant the next chance you get, and don't spend or even touch that check.

Disclaimer: IANAL, IANACPA, but do have a home-based business outside of my normal W-2 job.

BL.
 
-aggie- said:
I'd speak to my accountant.
Click to expand...

Already have. He's in China, will investigate when he returns in May. Trust me, I'm not spending that extra cash. That'd be stupid. I'm just holding out a tiny bit of hope that the IRS found something in my estimated tax payments where they realize I overpaid...and are giving that much back. Not likely, but who knows.

----------
bradl said:
This might be right. Seriously.

If you are self-employed, especially if going off of a home-based business, there are a lot more credits and deductions you can take outside of a simple W-2 or 1099-type return. For example, your home office, home improvements, phone calls for work, mileage, tolls, supplies.. Those plus a bit more are all expenses that can be written off (read: added as expenses on your return form) that wouldn't be able to be added on a normal 1040A or 1040-EZ form.

YMMV, and your CPA may have done a really good job on your taxes, so this may be right..

Disclaimer: IANAL, IANACPA, but do have a home-based business outside of my normal W-2 job.

BL.
Click to expand...

Well I own a property that I rent out, as well as factor in a portion of the DC property I rent as my office/work space. Not to mention cell phone/cable/energy/etc bills. My accountant is a longtime family friend and a trusted guy, so he might have undershot me, but who knows.
 
MovieCutter said:
Already have. He's in China, will investigate when he returns in May. Trust me, I'm not spending that extra cash. That'd be stupid. I'm just holding out a tiny bit of hope that the IRS found something in my estimated tax payments where they realize I overpaid...and are giving that much back. Not likely, but who knows.

----------



Well I own a property that I rent out, as well as factor in a portion of the DC property I rent as my office/work space. Not to mention cell phone/cable/energy/etc bills. My accountant is a longtime family friend and a trusted guy, so he might have undershot me, but who knows.
Click to expand...

My wife is self-employed and I do her taxes (our taxes). Look at your schedule C. Are you showing a huge loss (or any way the IRS would have changed something there to get a huge loss)? The bad news is that even if the IRS somehow got this right, you're almost certain to be audited.

Didn't you get something that said what they changed? I've had small errors in the past, and they told me what they changed in the letter they sent.
 
Something doesn't add up here.

Are you saying you didn't actually look at your returns before you signed them, so you really had no idea what your refund should be?

Or,

Are you saying that the amount that the Feds refunded is 8x what you filing lead you to expect?
 
smithrh said:
Something doesn't add up here.

Are you saying you didn't actually look at your returns before you signed them, so you really had no idea what your refund should be?

Or,

Are you saying that the amount that the Feds refunded is 8x what you filing lead you to expect?
Click to expand...

I looked them over, they were supposed to X, but what was deposited was X times 8.

Also, score on the New Glarus. I'm from WI originally, and have a keg of spotted cow in my home kegerator...delicious.
 
Do you have an S corp for your self-employment?

If not, your accountant might have been basing the self-employment ssa/Medicare contributions at the old rate when he gave you the estimate, but they were reduced for 2011 by about 2%.
 
Be lucky! I got $33.38 back... I can't even buy a nice steak dinner for 2 for that! I don't even think I could be an expensive lunch for 2 with that either.. :mad:
 
MovieCutter said:
I looked them over, they were supposed to X, but what was deposited was X times 8.

Also, score on the New Glarus. I'm from WI originally, and have a keg of spotted cow in my home kegerator...delicious.
Click to expand...

I suspect a mistake by the IRS in this case - don't touch a cent and chat with your accountant as soon as you can manage it.

The IRS can and does re-calculate returns but you know about it generally.

Mmmmmmm Spotted Cow..... :^)
 
tigres said:
If the accountant was 8x off, and the IRS is right: fire him-
Friend or not- that could have gone the other way. If I made that error in my business I'd be fired.

Just sayin-
Click to expand...

I don't think he was wrong. He's saved my butt in the past but not like this. I'm guessing IRS error. Friend or not I wouldn't have him as my account if he made egregious errors...now or in the past.

smithrh said:
I suspect a mistake by the IRS in this case - don't touch a cent and chat with your accountant as soon as you can manage it.

The IRS can and does re-calculate returns but you know about it generally.

Mmmmmmm Spotted Cow..... :^)
Click to expand...

Oh I'm not, it was just a shock to log into my account this evening...just gonna let it sit there until I get that IRS letter.
 
pvmacguy said:
Be lucky! I got $33.38 back...
Click to expand...

This is actually good.

Why give Uncle Sam a loan at 0%? I aim for a small payment every year - not big enough to attract any underpayment penalty, of course, but honestly I've never understood the "refund" mentality.

What's being "refunded" was _yours_ in the first place, they're just giving it back - why let them have it?
 
MovieCutter said:
I already contacted him. Just wanted to brag preliminarily and see if anyone else had such a discrepancy.
Click to expand...

Excellent.

Now we can talk about how you managed to get a keg of Spotted Cow all the way to DC, because I'm way more interested in that!
 
smithrh said:
Excellent.

Now we can talk about how you managed to get a keg of Spotted Cow all the way to DC, because I'm way more interested in that!
Click to expand...

I have a few Cheesehead friends in the District who DRIVE home to visit family 2-3 times a year. I give them cash+a commission, they smuggle Glarus kegs and cheese curds...and if I'm lucky, some awesome seasonings and blocks of mozz from Tenutas in Kenosha. I keep them in my kegerator and have 1-2 months of amazing beer you can't get outside of WI. We all win.

Speaking of which, I'm due for another pint.
 
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