I mailed off my tax forms for tax year 2001 and 2002 (as mentioned previously). I sent them Certified Mail so that I can verify that the IRS has recieved them. Just a simple precaution.
My first pass at what I owed for 2001 was the fear-freighted amount of $666.00. At least, it scared my friends.
But then I discovered (it pays to keep complete records, and I am so glad I did because this would be a very scary proposition otherwise) that I earned a total of $18.00 in interest income that year, which raised my total income just enough to bump me up a line in the tax charts, bringing my owed tax to $674.00.
Digging back into the recesses of Quicken, I found that I had sent the Feds a check for $601.60 in ’02, meaning I still owed them another $72.40.
Then, going over my form for tax year 2002, I found that I owed them $35.00… however, I can’t find any record of paying that amount, so I may still owe it. Ugh.
Luckily they’ve got my $686.00 refund to take all this out of (I was guessing at the amount in my previous post), but I still want to figure out what kind of penalty I’ll be paying. It’ll likely be small, sure, but it’s better knowing in advance. I turned to the page on the IRS website…
Could it be any more confusing?
I found another page on About.com that explained it more simply. Plugging those numbers into a spreadsheet, and my total penalty and interest comes out to $87.63. If you add in the owed tax the total comes to $164.91.
That could be higher or lower, depending on if they calculate the interest based on the current rate, or if they use a different rate for each 3 month period, and how they compound it. I just wanted a ballpark figure.
The hardest part is that I’m not going to hear back from them for 6 to 12 weeks or more. Ugh. I hate waiting.
But at least my part is behind me.