Money Matters
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Owe IRA $1700 :(
Not this year, but apparantly when I was getting divorced in 2010 I messed up my taxes and now got a letter that I owe. (btw, since then i have been getting them done professionally and got a small return this year that I already used to pay off my new appliances).
My question is this, would you a) pay in full - i have the money in savings although it would be a huge chunk of it or b) go on a payment plan and pay over 12 months?
I want to get this monkey off my back, so to speak and just get it paid but I know this may not be wise short term as it will leave me with very little in my emergency fund.
Thoughts?
Re: Owe IRA $1700 :(
I'm going to proceed as though you mean you we the IRS and not that you borrowed from/against your IRA.
As far as the IRS, what are the interest and fees associated with the payment plan? Since you have the money in savings, how do the IRS interest and fees compare to what you are making in your savings account?
Bleh - the IRS. I'd want to pay and be done. However, if you don't have any fees or interest to pay them for doing a 12 or a 6 month plan - I may take that option.
The ONLY issue there is verifying with them that they are repeatedly getting the payments and no wires are getting crossed.
Since it's bureaucratic government, you need to be on them to be sure it's getting processed correctly. AND keep all records, photo copy everything, and have backups to prove your payments whether you do one large lump sum or smaller ones over time. Keep records of phone calls and with whom you spoke.
It would depend on fees and interest. Also, what is the money you have to pay this off with earning? If its less than 1% I might just pay to get it out of the way.
Do they have an option where they can take it out of your paycheck? That would be nice and I would opt for that if no fees/interest.
Otherwise, just get it out of the way. You sound like you don't want to mess with this for a year.
Thanks to those of you who figured out I meant "IRS"!
I would pay it in full and be done with it. I work in banking and have seen the IRS levy an account, even though the person had a payment plan set up. Not sure if it was a miscommunication or what, but I would not risk it. Please of mind also means a lot to me.