The IRS Refunded Me $800….I Am So Embarrassed

By in Guest Post, Personal Finance, Taxes | 8 comments

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Below is a guest post from Super Frugalette. She blogs about being elegant in a fiscally contentious way. She shares with us that the IRS caught a faux pas on her tax return. It netted her $800 but wounded her pride.

In the past my last job, before I accepted the position of full time family COO (otherwise known as a stay at home mom), I worked as an accountant. I have done countless 1040s…I have done my own taxes for years. Many of the years had more complicated returns with Schedule E  (rental real estate) and one year painstakingly tracking $22K worth of medical expenses for Schedule A.

Thus you can understand how horrified and humbled I was when I received a letter from the IRS stating that I had made an error. The letter told me that I did not include Schedule M and that I would be receiving $800. Schedule M is the “Making Work Pay Credit”. It is refundable tax credit. Most workers have received the benefit of this credit in their paychecks. Thus, their paychecks were larger.

How could I forget Schedule M?

Everyone gets M!

(Well not everyone, but if you make less than $95,000 as a single person or $190,000 as a married couple and you have income, you qualify for the making work pay credit…I am starting to get way too excited about talking about taxes so I will stop…)

I knew everyone got M in 2009. I had forgotten that it continued into 2010 as well.

If I had paid for tax software, Schedule M would have been listed as a form for me to fill out…but no, I *do* taxes…I know it is snobby but it feels so beneath me to pay for tax software and I am a huge fan of freefillableforms. I mean it is FREE. What is better than FREE.?

$800 is better than free.

I wish I could say that I “learned my lesson” and that I will not use freefillableforms again. I will. However, I have new faith in the IRS. They are not just interested in auditing your return but ensuring that you receive your credits too.

So, the lesson learned from this story is do not be afraid to use free tax software. I still got my $800.

FYI – One month after I submitted my return, I received the letter that I had failed to file Schedule M. The IRS said it may take weeks for me to receive a check. The check was next piece of mail that I opened that day. It was right behind the IRS letter in the mailbox. I am thrilled I got a tax refund!

What are some of your oops financial moments? Ever had your money pride wounded?

    8 Comments

  1. Man that’s one mistake I wish I could’ve made haha. My only money pride wounded moment was being in debt, and it’s more of shame than wounded pride.

    20 and Engaged

    July 20, 2011

  2. I would have missed that too – I have little faith that the US government would ever give me a credit or deduction – but a few years ago we started having an accountant do our taxes and thankfully, he didn’t miss it!

    My money pride wounded moment was when we bought our house. It sits sideways on 6.7 acres. The other 3.3 acres in the 10 acre block sits on the back side of ours. The person selling our house also was trying to sell it. We have been kicking ourselves for 25 years for NOT buying that extra bit of land. Now there is a big ugly house on it!

  3. As an accountant, I can say that while I think the IRS needs to work on its communication skills and timeliness, I will give them there due when it comes to making sure everyone pays only their fair share. I have seen both ends–notices reducing the refund as well as increasing it due to error, omission, misunderstanding, etc. The fact is, the IRS is only interested in people paying what they ow, nothing more, nothing less. Why else would they give the people the ability to control their withholding through the W-4? Still, I’d never want to get on the Service’s bad side 😉

    Eric J. Nisall

    July 20, 2011

  4. @20- Yes, this is certainly a mistake with a happy ending!
    @Marie-Yikes, that would have been really nice to have all that land. Hopefully you like your backyard neighbors.
    @Eric-Thanks for weighing in from an accountants perspective. It’s nice to know there aren’t little green men back there figuring out how to screw the public 🙂

    Barb Friedberg

    July 21, 2011

  5. I’ve usually stuck to TurboTax for my taxes… I need to venture out and give free options a try! Thanks for the link, I will check it out.

    MoneyCone

    July 21, 2011

  6. Be brave @moneycone …once you try it, you’ll like it!

    @marie I would be bumming about the 3.3 acres too. You probably never anticipated a house on it!

    @Eric you should see my W-4 calculations…those were smashing no errors there!

    @20 If you do your own taxes, you can make this mistake, but it might be better to pay the $30 and ensure that you don’t and enjoy the peace of mind.

    Super Frugalette

    July 22, 2011

  7. Eight hundred bucks should go a long way towards easing the guilt, yes?

    101 Centavos

    July 23, 2011

  8. @101 and @ Mark- Getting $800 solves a few bad feelings!

    Barb

    July 25, 2011

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