payment with 1120 return- what now?

[alaska]

I have a client that files an 1065 (partnership with spouse). She has me do an extension- then she also did one online- she thinks, but also made a payment. So, of course in my software- it doesn't jive, because I didn't enter a payment- but anyhow, I have now entered said payment. They have a profit on their business & that payment is sitting there in the overpayment line. So, will they just get that payment returned to them? since the income & expenses passthru, I don't see the point. I have not had anyone make payments like that before. I don't see where that payment is making any difference... What am I overlooking?

[TAXNJ]

What?

1. Payment with 1120 return ? What does that mean?

2. 1065 return ?

3. form 7004 ? Is that the form used?

4. client files extension - she thinks? - but made a payment ? How can you make a payment when you think?

5. you filed an extension? What form?

6. The payment sitting in the overpayment line? What line # and form?

7. you don’t see the point - of what?

8. what are you overlooking ?

Is the above review correct so far?

[dtlee]

It is also possible, since it was not mentioned and it would make sense if she thinks, that the extension was for the personal return and the payment was with Form 4868.

[TaxGuyBill]

As was mentioned above, the FIRST step to find out if the payment was made for the Partnership (1065) or if it was made for her personal tax return (1040). Offhand, I'm not aware for an individual to file a Partnership extension (with a payment) online. So I SUSPECT she made a payment for her 1040, NOT the 1065. If she made the payment at IRS Direct Pay, I think that only covers a 1040 (and some odd other things), so it would be a 1040. She can "lookup" to see if her payment was done there.

https://www.irs.gov/payments/direct-pay

When you find that out, somebody will be able to further help you what to do.


The second thing you want to confirm is if they have a Partnership (Form 1065) or a corporation (Form 1120).

[snowshoe]

stupid mistake in title. A loooong spring, I guess. Anyhow- they file a 1065. Extension was already completed, however, clients said she went online & paid $$ with 7004. Said she just followed the directions & doesn't have documentation. Yes, my suspicion was that it was for their 1040- but she says it's with 7004. So, i entered that figure in the submitted with 7004 spot, but it makes no difference. It just shows as an overpayment- doesn't flow to K1. Is it just return to the partners as a refund- it's so weird! Ive not dealt with this before.

[TaxGuyBill]

doesn't have documentation. Yes, my suspicion was that it was for their 1040- but she says it's with 7004.

Have her FIND documentation. If it was paid online, what website did she pay it on? She needs to find out, and most likely the website will show what ACTUALLY happened.

If you enter the payment on the 1065 and it turns out it actually was for the 1040, that is really going to screw things up.

[TAXNJ]

stupid mistake in title. A loooong spring, I guess. Anyhow- they file a 1065. Extension was already completed, however, clients said she went online & paid $$ with 7004. Said she just followed the directions & doesn't have documentation. Yes, my suspicion was that it was for their 1040- but she says it's with 7004. So, i entered that figure in the submitted with 7004 spot, but it makes no difference. It just shows as an overpayment- doesn't flow to K1. Is it just return to the partners as a refund- it's so weird! Ive not dealt with this before.

Are you posting as ALASKA or SNOWSHOE?

This is as confusing as the Original Post! which was posted by ALASKA! Now, are you the Original Poster, if yes, how did you change your poster name?

You really have the reply posters guessing with their reply posts.

[snowshoe]

TAXNJ- I am both, but I didn't mean to be. I just signed in on my laptop & had posted earlier on my desktop. i didn't realize that I had 2 logins (sorry you guys!!!). I'll work on that.

[Burke]

Have her FIND documentation. If it was paid online, what website did she pay it on? She needs to find out, and most likely the website will show what ACTUALLY happened.
If you enter the payment on the 1065 and it turns out it actually was for the 1040, that is really going to screw things up.

If she paid by check, get a copy front and back of the check. You can determine where it went and how it was credited. I have had to do this with estimated/extension payments applied to the wrong year. It's easily resolved. As TGB advised, she can find out the application of her payment if she did direct payment online. Also get the bank statement it was debited to.

[snowshoe]

OK- She had do to a bit of searching. She did not do an extension- as I had already done it. She did send the IRS a check with the EIN of the partnership and the note (filed form 7004 for 2019 taxes 3/14/2020). That check was cleared 3/30. So, I'm still in same boat. What happens to that $4050? Is it refunded after 1065 is filed?

[Lion]

Form 1065 Line 27 Total balance due $0, Line 28 Payment $XXXX, Line 29 Amount owed $0, Line 30 Overpayment $XXXX. Doesn't that accomplish what you need?

[snowshoe]

Thank you Lion for reply. Yes, I can see the figures all entered properly on those lines. This is new to me, this prepaying taxes on the Partnership. It seems weird! Obviously, there is nothing due on the 1065. So, a refund is just sent back to Partnership? I have not seen this before, so I don't know how a refund for a 1065 will work. The client didn't understand what she was doing (and I didn't even hear about it until given docs to complete the return). On their personal return they will owe $$- funds are tight, covid has all but shut down their business- and she figures she sent $$. So, I'm having to make sure I'm not mistaken about any of this & explain that the check was marked with ein for partnership & isn't simply just able to be applied to their 1040. Having the $4000 tied up with refund (and, again, not experienced at how long that takes, etc) and owing $6,000 is a hardship. Wanted to make sure that I wasn't missing something that would be helpful, that is obvious to someone more knowledgeable.

[TAXNJ]

Thank you Lion for reply. Yes, I can see the figures all entered properly on those lines. This is new to me, this prepaying taxes on the Partnership. It seems weird! Obviously, there is nothing due on the 1065. So, a refund is just sent back to Partnership? I have not seen this before, so I don't know how a refund for a 1065 will work. The client didn't understand what she was doing (and I didn't even hear about it until given docs to complete the return). On their personal return they will owe $$- funds are tight, covid has all but shut down their business- and she figures she sent $$. So, I'm having to make sure I'm not mistaken about any of this & explain that the check was marked with ein for partnership & isn't simply just able to be applied to their 1040. Having the $4000 tied up with refund (and, again, not experienced at how long that takes, etc) and owing $6,000 is a hardship. Wanted to make sure that I wasn't missing something that would be helpful, that is obvious to someone more knowledgeable.

For ALASKA & SNOWSHOE (don't know what id you will use):

Are you the one who entered the payment amount that resulted in an overpayment?

but the Form 1065 OVERPAYMENT will be sent via a check OR Direct Deposit (if applicable) - cannot be credited to estimates, another payment due, or to tax due next year.

[Lion]

Hopefully your client will learn her lesson and not make any financial moves without calling your!

Set the partnership up for direct deposit, get her signature, and e-file ASAP. She has only until 15 July to pay her personal balance due.