A client came into the office last year needing assistance. We listened to his story to find out how we could help him.
His tax situation wasn’t complicated: married, no dependents, renting and apartment, W-2 wages were the only income for him and his wife. Somehow he became convinced that he had to file his federal tax return by January 31st of that year. He had his W-2, but his wife’s employer was a little behind in providing a W-2 for her, so he didn’t have her W-2 when January 31st, “the deadline for filing” came around.
He wanted to file as “married, jointly”, but he was missing her W-2 and he didn’t want to wait for it. Because his taxes were not complicated, he decided to use Turbo Tax to prepare and file his taxes. He figured he could resolve the “need” to file and the lack of supporting documentation by filing their federal tax return twice. He started by filing listing himself as the primary taxpayer and his wife as the spouse, using just his W-2 for income. It was filed and accepted by the IRS. A few days later, his wife’s W-2 arrived. Instead of filing an amended federal tax return, he prepared and filed a second return, this time with his wife as the primary and him as the spouse, using both W-2s to show all their income for the year. He also files their state return in the same way. This time the IRS rejects the return, because they have already received a return with his social security number. The state, however, accepts the return with the wife as the primary. It was at this point that he decided to get some help.
We were able to resolve the situation by amending both returns. The point of relating this story isn’t to hold up the person to ridicule, or put a knock against Turbo Tax (Turbo Tax is a great product; until I started preparing taxes professionally, it was my tax software of choice for many years), but rather to illustrate that if you don’t really understand what you are doing, it is easy to get into trouble because nothing is foolproof.
Do you have a similar, or otherwise favorite tax story? If so, please share it, I’d like to hear it.