How do I get proper credit for estimated tax payments?


Q. Because of the tax bite from Required Minimum Distributions and to take advantage of the pension exclusion, my wife and I now file separately even though it raises our federal tax bill. There appears to be no federal form to file when changing from joint to separate so that prior estimated tax payments can be apportioned correctly. My wife got a deficiency notice. What can we do?
— Taxpayer

A. The Internal Revenue Service only processes what it sees.

That’s why, as you’ve seen, it gets complicated.

Estimated tax payments may have been submitted with both names and Social Security numbers, but only the first one gets credit for the taxes paid, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

But that doesn’t mean that the second listed individual can’t get credit for half.

Instead, only means that the IRS will allocate everything to the first named and numbered individual, Karu said.

“To have the payments applied in the manner you prefer, you must contact the IRS directly, either by phone or by mail,” he said. “Certified mail works the best because you have a record of exactly what was requested.”

Karu said if he was to draft such a letter, he would be as specific as possible and include copies of the estimated tax payments and how the funds should be allocated.

All of that should be done at or before the filing of the returns, he said.

There’s one other caveat, he said. If all the payments were applied to one spouse and that spouse received a refund check. If the check was cashed, there is nothing that can be done, he said.

“By accepting the refund, that spouse has indicated that the funds were allocated correctly,” he said.

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This story was originally published on March 13, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.