Is there a better option for paying $20,000+ in taxes?
My husband and I receive money each month from his mother. The money is actually royalties for the production of natural gas from wells she has allowed a company to install on some land she owns. My husband and his 2 brothers are listed as limited partners. This has been a blessing for us (especially in the current economy), except that the royalites have almost tripled in 2008. As a result, we owe $15,000 (our tax liability for 2008 since the estimated tax payments we made weren’t enough) plus our first estimated tax payment for the year, which is about $5800.
Personally, I’d rather pay the whole $21,000 and be done with it, but not too keen on maxing out my credit card, draining our bank account AND borrowing money to do it. However, in comparison, I’d rather have debt with a creditor and his mother than the IRS, even if that means paying more interest. Would this be a decent way to approach this? I’m actually kinda (really) freaking out about how much we owe. If we paid it off, we will be literally flat broke and that only takes care of it until June when the next est. tax payment is due. Are there better ways to do this?
Some would argue that the extra cash should have been saved to cover the extra taxes… Actually you can solve your problem fairly easily. As the IRS states:
How to Set Up an Installment Agreement
Taxpayers wishing to pay off a tax debt through an installment agreement, and owe:
$25,000 or less in combined tax, penalties, and interest can use the Online Payment Agreement (OPA) or call the number on the bill or notice (have the bill or notice available, along with the social security number). A fill-in Request for Installment Agreement, Form 9465 (PDF), is available online that can be mailed to the address on the bill.
Note: If you recently filed your income tax return and owe but have NOT yet received a bill from the IRS, you can use the Online Payment Agreement to establish an installment agreement on current year returns. To determine the information needed to establish a pre-assessed installment agreement, refer to What Information Do I Need to Use OPA?
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They’ll approve the payment plan automatically and you can avoid taking on extra debt.
Comments
The IRS is not your friend….
References :
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References :
Does your mother or yourselves have to spend anything out of
pocket to maintain the land or pay for this company to install
on the land that she owns, if yo can find anything little as you might
think maybe improvements to the land, there might be some
loophole and deduct this as a write off on the royalty. Maybe even
some kind of gas deduction/write off stating that everybody drives
to check/maintain the land thae land even landscaping, im not an
irs expert on this, just a tax preparer, but as a realestate pro I have
2 properties that I deduct gas,landscaping,improvements to houses,
so your best option is why not call IRS and ask directly what are your
options, what can you deduct?
References :
Some would argue that the extra cash should have been saved to cover the extra taxes… Actually you can solve your problem fairly easily. As the IRS states:
How to Set Up an Installment Agreement
Taxpayers wishing to pay off a tax debt through an installment agreement, and owe:
$25,000 or less in combined tax, penalties, and interest can use the Online Payment Agreement (OPA) or call the number on the bill or notice (have the bill or notice available, along with the social security number). A fill-in Request for Installment Agreement, Form 9465 (PDF), is available online that can be mailed to the address on the bill.
Note: If you recently filed your income tax return and owe but have NOT yet received a bill from the IRS, you can use the Online Payment Agreement to establish an installment agreement on current year returns. To determine the information needed to establish a pre-assessed installment agreement, refer to What Information Do I Need to Use OPA?
—–
They’ll approve the payment plan automatically and you can avoid taking on extra debt.
References :
Payment Plans: http://www.irs.gov/businesses/small/article/0,,id=108347,00.html#2
Installment Agreements: http://www.irs.gov/taxtopics/tc202.html
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