Author Topic: Helping a friend with back taxes (easy ones) - Any tax preparers here?  (Read 1101 times)

Daisyedwards800

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My friend did not file taxes for the last few years, and got a notice owing the full amount of state taxes (NYS) of about $2576 plus taxes and penalties.  After calling the state, they advised him to file 2009, 2014 and 2015 and set up a payment plan.

I'm an accountant (rarely do taxes) and I said I would do the 2009-2015 tax years (both IRS and NYS) to help him out.  He can use the 1040EZ and the simplest form for the state taxes. 

Two questions:
1) For NYS, I am getting $2638 for taxes owed, while the tax notice says $2576. They did not break down the amount owed, but it's the difference between paying taxes, penalty and interest on $70 something dollars vs. $12.  I would like to see if they gave him some additional credit, not sure why I got a different amount of state/local taxes owed.

2) For the IRS, he owed $246 in 2010 tax year, which with penalties and interest would be $531.  I think the amount he owed is due to the reduced paycheck withholding by the IRS during 2009 and 2010 because of the Making Work Pay credit.  Because of this reduced withholding, he owed $246 instead of $0 or a very small refund.  He owed $10 in 2009, $246 in 2010 and $139 in 2011, and then he got a small refund or owed $0 for 2012-2015.  I read that you can send a form that will waive the penalty since the penalty is really due to them miscalculating the amount of withholding.  But that is a bit of a long shot.  It just sucks to pay an additional $300 for him that year in penalties/interest.

3) Can he still take the Making Work Pay credit from 2009 and 2010 if he is filing late?

Reason he didn't file is that he barely spoke English back in 2009 and now that he knows what is going on he wants to square it all away so I did 14 tax returns for him lol.
He's had the same job all these years and same address so it makes doing the returns pretty easy. 

Any guidance on the above questions would be appreciated. He took the standard deduction and personal exemption, and the only state credit he got was the school tax credit of $63.