Question

Debit charged, refund taken

Forum|Forum|1 year ago
May 5, 2024
1 reply
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This is the 2nd year in a row that turbo tax as had me pay with my debit and then still use my refund to also pay my federal taxes owed.

In my bank statements, I couldn’t find a refund for those $60 they owed me.

This year, I paid 1200 with my debit and the IRS says I owe nothing. But that my $700+ state refund was used to pay for it. The IRS customer service was also confused on why my account would be payed off with only those $700+ I was supposed to be getting back.
I look at my TurboTax and it states I owe $400+.
I filed on the 8th of April and it is now May 4th. Is there any one that can help me? Do I need to contact a lawyer? Or dispute it with my bank? I’m never using TurboTax ever again, they have taken so much money that I am going to have to look at all of my past years of filings now.

TurboTax Free Edition Online

SteamTrain

@Ofelia m

Certainly...use whatever tax software you feel you may be comfortable with in the future.

BUT

You need to note a couple major items about the TTX software:

1) A State refund can NEVER be automatically directed to pay a Federal tax due when you e-file.

2) Likewise: A Federal refund can NEVER be automatically directed to pay a State tax due when you e-file.

The Federal and State payments or refunds are entirely separate operations. The Feds and the States won't wait to be reimbursed by the other. They expect you to deal with your payments separately from each other.

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Now, there is a page in TTX that shows you the net of the two, to show you your effective situation for the year, just so you can see your full year's end result once all is completed...but one refund does not pay the other's balance due.

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So, for your situation, you pay your total tax due to the Feds as one event....the whole thing showing on line 37 of your 2023 form 1040.

....and you get your State refund separately, whenever the state eventually issues it (Assuming you transmitted your state forms, and they also accepted your e-file).

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*