If I owe money from a different year, will my next return deduct money to pay what I owe?

Forum|Forum|2 years ago
December 10, 2023
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TurboTax Online

VolvoGirl

Employee

Yes. The IRS will keep any refunds for prior year tax due.

b15w1737Author

Okay thank you so much it’s very confusing, also I am on a payment plan . I’m trying to pay it off before I have to do my 2023 taxes does that effect me ?

xmasbaby0

Employee

TurboTax never knows if you owe back taxes to the IRS or state, so the software is not going to calculate the tax you owe and "deduct" it from your 2023 refund, if that is what you meant. The 2023 software will only calculate your refund or tax due for tax year 2023. But....if you are getting a refund for 2023, the IRS knows that you owe, and the IRS will offset your refund for the amount you owe from past years even if you are on a payment plan.

https://www.irs.gov/uac/tax-refund-offsets-pay-unpaid-debts

IRS Treasury Offset Program Call Center at 1-800-304-3107

https://www.irs.gov/uac/tax-refund-offsets-pay-unpaid-debts

https://ttlc.intuit.com/community/refunds/help/what-is-a-refund-offset/00/26301

Reduced Refund https://www.irs.gov/taxtopics/tc203

NOTE: You can contact the IRS Treasury Offset Program Call Center at 1-800-304-3107 to ask if they have an offset for you on file. TurboTax would not have that information.

https://turbotax.intuit.com/tax-tips/tax-payments/who-can-garnish-an-income-tax-refund/L7cPPzDyc

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Curlyman17

Hi I owe back taxes from a previous year but now I owe taxes this year. Will they add that to my taxes I already owe or do I have to pay that separately?

MonikaK1

Each tax year is accounted for separately, but the IRS will generally apply payments to the oldest year first.

If you already have an installment agreement with the IRS, you can apply to revise your existing IRS installment agreement to add any remaining tax for 2024. See this IRS webpage for details.

From IRS Topic 202:

If you can't pay in full immediately, you may qualify for additional time --up to 180 days-- to pay in full. There's no fee for this short-term payment plan. However, interest and any applicable penalties continue to accrue until your liability is paid in full. Individuals may be able to set up a short-term payment plan by using the Online Payment Agreement application or by calling us. Businesses must call for a short-term payment plan. Check the hours of availability.

@Curlyman17

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