Nikki wrote:If, on the other hand, the returns are accepted as filed, I hope she attached a check for the appropriate amount -- including the penaltiues for late filing, under withholding, and interest to date.
According to the complaint in the refund suit, Hendrickson earned about $60,000 in each of 2002 and 2003, for which his witholdings were about $5,600 for income tax, $3,650 for FICA, and $850 for Medicare.
I don't think that we know Doreen's income, because she received Forms 1099-MISC and her earnings were not reported in the complaint.
If she filed separately, she's not going to be able to claim credit for Pete's withholdings, and her income, net of expenses, would be subject to self-employment tax.
We also don't know if the Hendricksons might be entitled to itemized deductions for mortgage interest or real estate taxes, and we don't know if Doreen can claim those deductions because we don't know whether she paid them or Pete paid them.
So there could be some significant tax liabilities, and some significant penalties for failure to file, failure to pay, and failure to pay estimated taxes.
Maybe that's why Doreen has been crying. Maybe it's finally beginning to dawn on her that she could owe some big numbers for those two years, and for other years as well.