Tax question

[changed1]

Oh no! I just completed a preliminary TurboTax, and it looks like this year we will owe about $2300. Yikes. We lost our home last year and adjusted our W-2's to reflect no longer receiving the tax advantage of owning a home. I really don't know what happened. I am sick about owing tax money when things were just starting to look up! We have never owed money to the IRS!

My questions are: Typically, does the Trustee re-evaluate our budget, and then we pay it through the plan? Are we expected to pay it all before April 15? Anyone have a similar experience?

Thanks.

I have an email into our attorney, but it can take a while before he responds. Thanks for any help.... I'm pretty worried right now!

[TheBajan]

Hello there,

I'm not sure how the trustee handles it but I can tell you that yes, the IRS expects to be paid in full by April 15. You can work out a payment plan if that's not possible but it won't stop interest and penalties from accruing. I'm sure someone will be able to answer regarding the trustee but I have no experience with that. I do wish I had better news for you. Hopefully as you finish your taxes, you will find you don't owe quite as much as you think.

Best of luck and welcome to the forum.

The Bajan

[hmsmith]

You'll be able to make payments, but there will be interested and late fee's. I don't know what those are, but you could always call them to find out.

[HHM]

How far into the chapter 13 are you?

You will have no problem setting up a payment plan with the IRS and right now, interest is only 3%.

If you are very early in your plan, you could go in and modify, but if you can swing about $120 to $150 a month to pay the IRS, I wouldn't bother tweaking the plan.

[sophieanne]

[QUOTE=HHM;593319]How far into the chapter 13 are you?

Hi HHM,

Just a question, as I find myself in the same situation this year; we owe way more than expected (about $2800).
We are 6 months into the plan. Just received a list of who filed claims from the trustee yesterday with a note that we can add any debt that was pre-filing for another couple months.
I don't mind setting up payment with the IRS, would this be something that we would need approval from the trustee to do?
Thanks.

[Floridagail]

I file the extension form, that gives me until oct 15 to file. So I have more time to save. I get a slight penalty, but it is not like the interest and the charge for aggmts. If I have to, then I do the aggmts.

[katztoo]

We owed a large amount one year in our 13 and looked into irs payment plan and found we were not allowed to do it without the trustees permission. Go on the irs website and read all the fine print abut these payment plans, its in there somewhere. we ended up super budgeting (barley buying food and going nowhere!) and paying what we owed in April.

[lillymarlene]

I ended up owing for 2010 about $2400. It was just at the time my plan was about to be confirmed and my IRS agent said to put the taxes in plan. My attorney however, said that it was really too much trouble to reopen the ch 13 plan and to go ahead and make a repayment plan with the IRS. I finally finished paying for 2010, Nov. 2012.

Whether you need approval from your trustee or not would probably depend upon what state/district where you are located.

[tobee43]

I file the extension form, that gives me until oct 15 to file. So I have more time to save. I get a slight penalty, but it is not like the interest and the charge for aggmts. If I have to, then I do the aggmts.

your extension only saves you filing time but not interest nor penalties. they do add up quickly, so just be mindful about it.

changed1...when losing your house did you give things to the salvation army, to local charities???? i know we donated our trees to the tune of thousands to the state and we had an excellent write off to help off-set not having the mortgage interest and taxes. also, what about business expenses???? do you have any??? medical expenses, including transportation??? child care expenses, school loan interest? i'm just searching for ways?

[coronaglen]

i owed taxes and set up a payment plan with irs. no issues. irs is very nice when you call them and work with them. you can make a very small payment. even spreading it over i think 5 years. don't sweat it.

[zeezee]

Those suggestions are fine for this year but you need to also account for any taxes you will owe for future filing years as well. Check your withholding and contributions to IRA's, etc. so that you can manage what you owe/don't owe for next year and beyond.

[spidge]

Can I direct this years federal refund to last years balance? My home loan has one more year of deferred interest to bank against my write offs and I have had difficulty pin pointing the amount for tax planning purposes.

[Mayo]

If you owe them money do you even get a refund? I may be wrong..

[spidge]

If you owe them money do you even get a refund? I may be wrong..

The IRS did not hold back last years refund even though I owed from the prior year. It was not much so I did not make an issue of it then. This year will almost pay off the balance so I am hoping to offset. I guess I will call the attorney to see if possible.

If anyone has more to share please do.

[keepsmiling]

How far into the chapter 13 are you?

You will have no problem setting up a payment plan with the IRS and right now, interest is only 3%.

If you are very early in your plan, you could go in and modify, but if you can swing about $120 to $150 a month to pay the IRS, I wouldn't bother tweaking the plan.

I don't understand this.
It wouldn't be just this year... it would be for every year of the plan henceforth. Which, even if you are midway thru a 5 year plan, equals significant money.
Wouldn't it be worth a modification for that much money?