Will the IRS just take it out of my account? How exactly does this work?
I did not realize that if you sell stocks you have to file a 1099B, so I went ahead and did my return already. I was just emailed the 1099B today. My question is if I don't do anything with it will the IRS just take however much I owe directly out of my bank account?
If I refile, will I have to pay the IRS extra? I have no idea what to do I didn't invest to make money I just wanted to get a feel for how stocks work
- SlickterpLv 71 month ago
You need to amend. If the IRS does it, they will use a cost basis of $0 iof one is not listed, making the entire sale taxable.
- ShayLv 71 month ago
The IRS will do nothing at this time. It will take them some time to process everything and realize that you didn't correctly report your income. Then they will send you a letter that explains you made an error and that you owe them $XXX amount in unpaid taxes plus $XXX amount in fines or fees for failing to correctly report your income.
My brother-in-law made an error one year and it took almost three years before he got a letter about the back taxes and fees.
You need to file an amended return to report the income and if you owe taxes because of it, you will need to send a check to the IRS. They will never automatically take it. Even if you fail to do anything - they would start by sending letters when they finally realize the error.
At some point, they might automatically take money from you - but that would be after several notifications and lots of fees have built up.
- AmyLv 71 month ago
You should file an amendment to your tax return.
If your income is fairly low and your stock trade was long term, then you do not owe any more tax.
If you do nothing, the IRS will eventually notice the missing information and will send you a notice that they disagree with the return you filed. They will NOT take money from your bank account, they will send you a bill (with penalty and interest).
- JudyLv 71 month ago
You mailed the 1099B? Uh, you don't mail it unless you sent it to your tax preparer to do the amendment you need to do.
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- martinLv 71 month ago
No, they send you a form letter telling you what you owe. You mail them a check.
- StephenWeinsteinLv 71 month ago
The IRS will not take out only however much you owe. If the IRS has to take out something, then they will have to take out more than you owe.
You must "amend" (change what you filed) using Form 1040X. You cannot "refile".
- NALv 71 month ago
To show the sales, you need schedule D and, if old stocks where basis is not forwarded to IRS, form 8949.
If you don't amend to show the sales in about 9-18 months, the IRS will guestimate your capital gain, call it all short term, might make the basis $0 and will send you a bill.
You don't actually give enough information to know if you will owe or not. Did you have a gain? Was it all short term?
- DEBSLv 71 month ago
You need to amend your return and pay any potential additional tax. You will only hear from the IRS if they audit you. Then you will owe the tax plus interest and penalties.
You must report ALL income. That includes money from interest, stocks, or other investments.