JB, considering that, what ramifications would be involved in a 401k withdrawal for this purpose?
My choice would be to do that, and be done with it, unless there is a risk of derailing my Ch13 plan, or jeopardizing my ability to continue making contributions to the 401k .
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Originally posted by Scottowl View PostDid you make payments each month, or was it more sporadic?
I wonder if this is normally what IRS does?
If so, Would any refund in later years go to this tax debt and not back to the trustee? Obviously there would be no refund if IRS applied it to the debt.
Unfortunately, falling behind in taxes after filing can not only get you in trouble with the IRS, but also the Trustee. Keeping your taxes from becoming past due is normally a condition of confirmation (and is a line item in many plans).
If you owe in a year after filing and during your plan, you pay the IRS. It's better to pay as much as you can by April 15th and pay the rest by September/October. Generally the IRS won't bother you until October or later.
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Did you make payments each month, or was it more sporadic?
I wonder if this is normally what IRS does?
If so, Would any refund in later years go to this tax debt and not back to the trustee? Obviously there would be no refund if IRS applied it to the debt.
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The IRS wouldn't allow me to go on a payment plan, nor would they file a claim for the taxes owed. My lawyer told me to send them payments. I have made payments periodically through IRS Direct Pay without issue and will pay them off when I no longer have to send payments to the trustee (last payment is in April).
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Income taxes
This is the first year for me to file while in Ch13. Is there anything for me to be aware of?
I usually use TaxAct, if not filling the form by hand. Would it make sense to see a tax professional?
Also, near as I can tell, I will owe the IRS about 4-5k after filing in April. At first I thought about a 401k withdrawal(I'm 61, so no age penalty).
I could also look into a 401k loan, but there is the cost of repayment.
My only other option, as I do not have anywhere near the amount owed, would be to go back on an IRS repayment plan. Is that allowable?
What would be the best course to pursue?
The reason for this problem is severe under withholding (single, no dependents claiming 6 dependents) clear through September. I now claim at the proper single/zero dependent rate, and don't anticipate future problems.Tags: None
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