I have no idea what to do about my tax bill

[Anonymous]

What has caused all this? My family and friends with ASD/ADHD would get into such mess.

[Anonymous]

The IRS allows automatic installment agreements in certain cases. Google to find out the requirements. They will be able to add 2025 later but this is not a long term solution.

Are you basing your 2025 estimates on your 2024 tax liability or your actual 2025 income? If your 2025 income is lower, you can pay less (if the amount was based on your 2024 tax liability which is likely what your cpa did).

[Anonymous]

Anonymous wrote:We have an extension, but still owe 40K for 2024. Haven't paid my quarterlies for 2025 (24K each). I have 20K in bank, and maybe another 10K going in this month (I am self-employed consultant, so next month may not have this much income). I have no idea what to do. I paid a shit-ton for CPA and that person is AWOL. Please talk me off the ledge and give me some good solid (nonjudgmental and) realistic advice, PLEASE

Get on a payment plan and get caught up with those quarterlies, stat.

[Anonymous]

Stop your insane spending, OP.

If you can't afford to pay your bills (like taxes). then you can't afford to buy X, travel to X, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not judging but we need to understand how everything got so out of whack. How do you end up owing these huge amounts?

Every year we are behind on taxes, so I spend the first 9 months of every year playing catch up on the previous year’s taxes. This year I saved 35k by April (put down partial payment on our total 60k bill and paid state taxes in full). I just can never catch up.

Because you are living on your taxes. You need to cut way way back on spending.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not judging but we need to understand how everything got so out of whack. How do you end up owing these huge amounts?

Every year we are behind on taxes, so I spend the first 9 months of every year playing catch up on the previous year’s taxes. This year I saved 35k by April (put down partial payment on our total 60k bill and paid state taxes in full). I just can never catch up.

You know you need to stop living beyond your means to stop this unhealthy and unsustainable cycle. Cut every expense that is nonessential. Cut till it hurts.

+1 you’ve got ‘extra’ cash somewhere- get cheaper cars, go in less vacations, make your own meals, ….

You don’t want a tax lien. Get your finances in order, which goes way beyond what you are currently doing.

[Anonymous]

You need to put the tax money in a different bank account immediately when you earn it and don’t touch it. It might mean that you need to sell a car or even a house. You can’t afford your lifestyle.

[Anonymous]

OP! Come on. How can someone making so much money pretend to be so dumb.

It’s easy for someone going self employed to have a one year adjustment where they are a little shocked by their tax bill.

But after that, it’s not hard! It’s very predictable. You know what you’re going to owe in taxes. You separate the amount as soon as it comes in (whether that’s just tracking or an actual separate pile) and you pay your quarterly estimated. Come on, man. Don’t play dumb.

[Anonymous]

Whatever you are paid, put it in a separate business account. Transfer 50% of that to your personal checking account. Pay taxes with the other 50%. You'll end up with a small surplus. Then find a new accountant.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not judging but we need to understand how everything got so out of whack. How do you end up owing these huge amounts?

Every year we are behind on taxes, so I spend the first 9 months of every year playing catch up on the previous year’s taxes. This year I saved 35k by April (put down partial payment on our total 60k bill and paid state taxes in full). I just can never catch up.

OP- you need to pay your tax liabilities the way you would pay any quarterly bill in the year you owe. We use a spreadsheet. So, for instance, we just sold some stock at a profit and put it into a savings account. My next move was to immediately calculate the tax liability, contact our accountant and pay the estimate out of that savings account- only then do we reinvest the money.

It's not perfect but assuming we don't lose or gain a massive sum of money by the end of 2025 (both scenarios seem possible in this market) it gets us closer to our tax bill.

The bottom line is that, as others have said, you're operating off of money that you owe and it makes your position precarious. Pay down 2024 and start getting on track with some sort of spreadsheet/ software that you address on a regular basis.

Years ago we were asleep at the wheel during a job change, a stock pay out from a previous job, etc. We owed a 60K tax bill and had to cash out some investments to cover it. It put us behind for a long time- we learned the the hard way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not judging but we need to understand how everything got so out of whack. How do you end up owing these huge amounts?

Every year we are behind on taxes, so I spend the first 9 months of every year playing catch up on the previous year’s taxes. This year I saved 35k by April (put down partial payment on our total 60k bill and paid state taxes in full). I just can never catch up.

Then you don’t have a tax problem, you have a spending problem. Give us your budget and we can tell you what to do.

Well said.

[Anonymous]

Respectfully, you need to do two things:

1) Consult a tax attorney ASAP about an offer in compromise.

2) Hire somebody who can help you set a monthly budget that you actually stick to.

It’s not the accountants fault you have a tax liability.

Good luck. I mean that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not judging but we need to understand how everything got so out of whack. How do you end up owing these huge amounts?

Every year we are behind on taxes, so I spend the first 9 months of every year playing catch up on the previous year’s taxes. This year I saved 35k by April (put down partial payment on our total 60k bill and paid state taxes in full). I just can never catch up.

Then you don’t have a tax problem, you have a spending problem. Give us your budget and we can tell you what to do.

Oh ... they have a tax problem.

[Anonymous]

Anonymous wrote:Respectfully, you need to do two things:

1) Consult a tax attorney ASAP about an offer in compromise.

2) Hire somebody who can help you set a monthly budget that you actually stick to.

It’s not the accountants fault you have a tax liability.

Good luck. I mean that.

The IRS will not accept an offer in compromise from someone with a high income. A payment plan is the only option.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Respectfully, you need to do two things:

1) Consult a tax attorney ASAP about an offer in compromise.

2) Hire somebody who can help you set a monthly budget that you actually stick to.

It’s not the accountants fault you have a tax liability.

Good luck. I mean that.

The IRS will not accept an offer in compromise from someone with a high income. A payment plan is the only option.

Good. People who make that much money shouldn’t be able to avoid paying taxes because they spend too much.