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Message
re: Taking out a loan to pay taxes...
Posted on 4/12/10 at 4:58 pm to Tiger in Gatorland
Posted on 4/12/10 at 4:58 pm to Tiger in Gatorland
quote:
I received $1500 back this year
too much ...
1
Posted on 4/12/10 at 5:00 pm to threeputt
quote:
too much ...
I know, but I liked it much more than writing a check. And frankly, $1500 wouldn't have gained shite in savings/investments.
Posted on 4/12/10 at 5:16 pm to Tiger in Gatorland
Almost the same damn thing happened to me and my wife following our first year of "real jobs" back in the 90's. We had waited until dang near the last day to do our taxes, so I went to the bank at the bottom of the building I worked it and just said, "I need 5,000 dollars." The loan officer had a sense of humor and hooked me up for a sig loan. got the money the next day. really sucked to add that loan to the student loans I had at that the time, but you will get it paid off and move on.
Are you a member of a credit union? If so, you're often guaranteed a sig loan up to $10,000 and the rates should not be too brutal right now.
Are you a member of a credit union? If so, you're often guaranteed a sig loan up to $10,000 and the rates should not be too brutal right now.
Posted on 4/12/10 at 5:23 pm to Gaston
At least you have the option to take out a loan or use a credit card. When I did my taxes in 08 I was still trying to rebuild my credit so taking a loan out wasn't an option. Worst case scenario...you sign up for installment payment. Very easy to do. You call the IRS and tell them how much you want to pay a month on it. You have 5 years technically to pay it off, so you can just figure that it to how much you want to make your monthly payment, although I recommend not setting it too high. Reason why I said to say a lower payment....is that if for some reason you miss a payment or if it is even one day late and you don't notify them....they can void the whole installment agreement and insist you pay the balance.
Posted on 4/12/10 at 6:19 pm to lsunurse
Silly question, but how were you so far off on your taxes?
And the obvious question, did you do your taxes correctly? May want to professional advice before you fork over an additional 5 grand to the fed.
And the obvious question, did you do your taxes correctly? May want to professional advice before you fork over an additional 5 grand to the fed.
Posted on 4/12/10 at 6:30 pm to Gaston
Why not an installment plan from the IRS?
Posted on 4/12/10 at 6:31 pm to C
quote:
how were you so far off on your taxes?
Who the frick knows? I did my withholdings per the worksheet, and I have more deductions than the standard amount. My salary doesn't vary per month. Last year we came up a reasonable amount short, like 10% of this year. $5k is shocking to me. I set my withholdings to zero now, but I really don't know what else to do.
We have no other form of income. How can I tell if I did them right, I mean it looks pretty damn easy. I have physics degrees and I work with Standards everyday, so I have trouble thinking I need to go to H&R so some random other person can say the exact same thing. Maybe I should try a higher food chain tax professional.
Posted on 4/12/10 at 6:34 pm to Gaston
did you prepare the return by your own means or did you use an on-line service? Something sounds pretty remiss and it might be worth doing your taxes on-line (compare/contrast)...fwiw
falls
falls
Posted on 4/12/10 at 6:37 pm to Cash
quote:
Why not an installment plan from the IRS?
Because the instructions state that loans or credit cards are cheaper, implying that the installment plan is the last resort. I was just curious about what type of loan is an irs loan. I guess it depends on what I put up as collateral.
I just didn't expect this type of tax bill. I'm not going to stress. frick em. I have to work everyday anyway. Nothing's going to change.
Posted on 4/12/10 at 6:50 pm to Gaston
quote:
I have physics degrees
Yeah I have an engineering degree, and I still get someone else to do my taxes. You are dealing with too much money to not get professional help that will cost you less than 10% of what you end up paying. Its not the math, its the laws that we do not understand. Get some help. There are credits and deductions that we, joe public, do not know about.
Posted on 4/12/10 at 6:55 pm to C
Yea, I know. I just need to file an extension, pay $750 like that's what I think I owe, then start saving jack. If they can help me this year, then I'll still owe some on penalties, but I'll some advise on how to deal with this in the future.
Posted on 4/12/10 at 6:59 pm to Gaston
quote:
Gaston
If it makes you feel any better I owe $4,200 for federal.
This probably won't make you feel better but I have more than enough in a MM to pay it so I am not worried about a loan.
I do know of someone that did an installment plan a few years ago for $8k in taxes owed. I think the interest was around 5%. Not the end of the world. Don't sweat it.
But do build up a hefty emergency fund and park it in a money market.
Posted on 4/12/10 at 7:05 pm to Cash
quote:
But do build up a hefty emergency fund
Yea, that's more about my source of frustration than anything else. I'm mad at myself for not being able to absorb this with more style.
Posted on 4/12/10 at 7:11 pm to Gaston
quote:
Because the instructions state that loans or credit cards are cheaper, implying that the installment plan is the last resort.
Actually the instructions say bank loans or credit cards may be cheaper. The cost to get an installment plan going withthe IRS is $105, but it is reduced to $52 if you agree to make payments by electronic funds transfers. You can tell the IRS how much you want to pay per month and the day of the month you want the payments made. You can make payments in addition to the minimum monthly payments you request to reduce the costs of interest and penalties.
The IRS installment plan generally works out to be more expensive than a credit card if the taxpayer is able to repay in less than six months. If it will take you more than one year to pay off the liability, then the IRS installment plan is likely cheaper than using a credit card. In between and you have to analyze the interest rates to determine which approach is better.
Posted on 4/12/10 at 7:11 pm to Gaston
I thought we told you step one was file an extension. Then take the next 6 months and save up and pay it then.
frick you can often file a second extension if you have a good CPA. I think I just paid my '08 return.
frick you can often file a second extension if you have a good CPA. I think I just paid my '08 return.
Posted on 4/12/10 at 7:14 pm to Gaston
quote:
Maybe I should try a higher food chain tax professional.
Pay a CPA $300 to file the extension and have more time to look over it.
Where are you? MS? If you are really in a bind I can see if my dad has time to add you to the list.
Posted on 4/12/10 at 8:24 pm to Gaston
If it makes you feel better my wife and I owe more than that, but I knew it was coming for ~ 7 months and it's not a big deal. Finance geeks are always looking around the corner.
Do you guys contribute to 401k's? If so something doesn't smell right, unless your wife's income is throwing you into a higher marginal bracket and the withholding are off. I would get the CU loan and reduce discretionary spending to where you can pay it off w/i 6-months and get on with your lives, if you have to cut 401k contributions do it, then ramp them back up.
Do you guys contribute to 401k's? If so something doesn't smell right, unless your wife's income is throwing you into a higher marginal bracket and the withholding are off. I would get the CU loan and reduce discretionary spending to where you can pay it off w/i 6-months and get on with your lives, if you have to cut 401k contributions do it, then ramp them back up.
Posted on 4/12/10 at 8:26 pm to Golfer
Yea, MS. I appreciate the help. I'll see what I can do tomorrow.
Posted on 4/13/10 at 11:28 am to Gaston
You mentioned getting the loan and stating for home improvement purposes. I don't think you have time to get a HELOC, but I would consider going that route. (put on CC or signature loan and then pay off with heloc) IT's collateralized and low interest that is deductible from your taxes if you itemize.
Hope and change! I got busted for an add'l 4,000, and that was AFTER bumping up the withholding for another 3,000 out over the year.
Hope and change! I got busted for an add'l 4,000, and that was AFTER bumping up the withholding for another 3,000 out over the year.
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