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Discussion Forum Index --> Basic Tax Questions --> Big Income Tax Liability
Discussion Forum Index --> Tax Questions --> Big Income Tax Liability
Cherryblossom (talk|edits) said:
| 6 April 2008
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| I just found out I have to pay over $10,000 to IRA and my state. I don't have the money to pay off my income tax liability. What can I do?
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Irsfixer (talk|edits) said:
| 6 April 2008
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| Just speaking of the federal liability, file on time, pay what you can and send Form 9465 in with your return to request an installment agreement. If this is the only federal tax you owe, it is automatic and you can get up to five years to pay. You are encouraged to pay it off as quickly as possible.
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DZCPA (talk|edits) said:
| 6 April 2008
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| Borrow the money from Mommy or Daddy. Make sure to pay them interest at the legal rate.
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WBR (talk|edits) said:
| 6 April 2008
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| I would go with an installment agreement. Irsfixer is correct that it should be get automatic acceptance from the IRS plus you can dictate the terms as long as they fall within the IRS guidelines. I would not put it on a credit unless you can pay it off with in a short period of time.
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Cherryblossom (talk|edits) said:
| 6 April 2008
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| Thank you guys so much. Especially, Irsfixer & WBR. For federal, I can use Form 9465, how about NYS liability? Thanks in advance!
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Nancyshoemake (talk|edits) said:
| 6 April 2008
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| be very careful with an installment agreement. you skip a payment and you are toast. just had a client this week that missed a payment and the agreement is off. they sent a notice of levy to the employer - set it up where it is automatically taken out of the account. Also know that if you owe for another tax year, the installment agreement becomes void so you need to be proactive if you must include additional years.
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Irsfixer (talk|edits) said:
| 6 April 2008
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| If a payment is missed, a CP-523 is issed and you have 30 days to catch up. If that notice is ignored, the case then progresses through collections with a Letter 2050 and finally a Letter 1058. This process takes literally months before it progresses to a levy. In order to get levied, a lot of notices have to be ignored. Soemone was asleep at the wheel.
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CrowJD (talk|edits) said:
| 6 April 2008
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| What about including a check for what you can, get a bill 5 weeks later, pay what you can again... then think about the installment agreement if you need it?
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Dyeomans (talk|edits) said:
| 6 April 2008
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| What are the installment payment interest rates?
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Irsfixer (talk|edits) said:
| 6 April 2008
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| User fee of $105 or $43 if do direct debit. Interest at 6% annauly, compounded daily. Penalty of 1/4 of one percent per month, if in an agreement.
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