Reply to I have no idea what to do about my tax bill

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Not judging but we need to understand how everything got so out of whack. How do you end up owing these huge amounts?[/quote]

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.[/quote]

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. [/quote]

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