I made $70k in 2006 and $60k in 2007 with no money saved to pay, does anyone know what my options will be?
2007-10-11 14:08:11 · 5 answers · asked by jonesanthonyaj 1 in Business & Finance ➔ Taxes ➔ United States
Between those two years presuming you are single and self employed, you will owe a bit more than $40,000 in income and self-employment tax plus penalty and interest. I can not speculate about what you would owe in state income tax since state rates range from zero to 23% of the federal rates. What you will owe is beyond the almost automatic installment agreements that are available if you owe less than $25,000 so Form 9465 will not work for you. If you can pay the balance down to that and can pay what is left over five years AND pay current taxes, you will avoid the filing of a tax lien which will cause your credit rating to go in the toilet. I am an enrolled agent, licensed by the Treasury Department to represent taxpayers (the same as attorneys and CPAs.) I specialize in clients with back tax debts and see this all the time. You need to make enough changes in your life so that you can pay all your bills, including your taxes.
2007-10-11 17:41:26 · answer #1 · answered by Anonymous · 0⤊ 0⤋
File as soon as you can for 2006, and on time for 2007. If you owe, there are penalties for late filing in addition to the interest and penalties for not paying on time, so at least you'll stop some of the penalties, which otherwise will keep adding on every month.
If you can't pay all that you owe at once, the IRS will set up a payment plan for you.
2007-10-11 23:47:08 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
No withholdings at all. Maybe you should. For your 2006 taxes, you will be facing taxes due, penalties and interest. You need to file them now. You might have to make payment arrangements with the IRS. As far as your 2007 taxes, you will have up to April 15, 2008 to file. Start taking money out of your paycheck at work (this is withholdings). You will have to complete a W4 form at work. Contact your payroll coordinator at work for the W4 form. Do not forget your state taxes as well, another W4 form.
2007-10-12 08:08:17 · answer #3 · answered by Gary 5 · 0⤊ 0⤋
Assuming you are self-employed and these amounts are your net profit, you will owe quite a bit. You can file Form 9465, Request for Installment Agreement, to setup a payment plan. If you are unable to pay, you should consult a tax professional to look into an offer in compromise.
2007-10-11 23:22:55 · answer #4 · answered by JaretR72 2 · 0⤊ 0⤋
Payment plan.
2007-10-11 23:17:16 · answer #5 · answered by Bostonian In MO 7 · 0⤊ 1⤋