Doing my own taxes (earned income, SSA, retirement incomes) and I did not include a 1099 for approximately $199 of income from dividend income. How much do I need to worry about this getting flagged?
Did not include small 1099
byu/Interesting-Coast-72 inpersonalfinance
Posted by Interesting-Coast-72
9 Comments
To be clear this is a question for an accoutant. And I am not.
That said, 199 sounds like a rounding error to me and highly unlikely to get you flagged for an audit.
It will probably be flagged. If everything else is normal you’ll just get a letter about it and will need to file an amended return.
More likely to get flagged than if you had omitted $1.9 mm of dividend income. They come after us poor folks.
Joking aside, worst case scenario, the IRS flags this, you get notified and you pay taxes on this, maybe a small fine/penalty of something like $9.
I had something similar way back in 2012 or 2013. I cashed out an old ESPP account which I wasn’t using mainly because the job where I had this ESPP laid me off four or five years earlier, which is why the 1099 got lost in the mail and I totally forgot to include it when I filed taxes that year. So I under reported my income by something minuscule like $130. Didn’t even realize it until about nine months later when I got a letter from the IRS letting me know about this. They just asked me to pay the taxes on it and a small penalty fee or maybe it was interest, so I ended up paying a total of $38.
It gets flagged automatically by an automated matching process.
I doubt they would send anything over $200 but even if they do, it is just a letter letting you know there is a discrepancy. Last time it happened to me it was over 2k and all that happened was I had to pay about $150ish plus a processing fee. I didn’t even have to file an amendment just took care of it over the phone
Does the form say “De Minimis” on it?
I once had 2 W-2’s from when my company’s payroll office changed providers mid year and I forgot to include one of them. The difference was over 10,000 in pay. I got a letter from the IRS with the amount I needed to pay. I just sent in the check.
I skip reporting bank interest income all the time and nothing ever happens. It was around $500 this past year
If you are getting a refund, the IRS will automatically add the 1099 and send a letter saying your refund has been reduced, showing the difference on a few lines of the return, and the amount your refund has been reduced.
If you owe $ they will also let you know.
It’s unlikely there will be a penalty/interest for a small amount.