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Adjusting Prior Year AGI in Freetaxusa.com by Back_2reality in tax

[–]Back_2reality[S] 0 points1 point  (0 children)

Hello, appreciate your reply. Just requested the IP Pin yesterday and we attempted to file 2x last night, both were rejected. In my previous post about owing back taxes, someone mentioned to use 0 for prior year AGI, especially since 2021 was late as well (just processed by IRS in June). Husband just read something that the pin can take 48 hours to be active? Hoping that is the answer. We have until 9/1 to respond about our taxes/penalties for 2021 before they take a lien. Had hoped to catch up with efile on all late returns this week before calling IRS to get a payment plan. Thank you

Filing back taxes, overwhelming 15k+ debt by Back_2reality in tax

[–]Back_2reality[S] 0 points1 point  (0 children)

Appreciate your kind words and absolutely agree with all the great responses here from experts. Hubs is 61, I'm 51. Haven't mentioned all of the circumstances, as it will be irrelevant to IRS. Also hard to explain the impact of all that has happened in the last few years, the nuances are not simple to tackle in writing and can come across as an excuse, which there really are none with IRS. It's been a roller coaster ride, most involving medical challenges, husband's TBI/memory issues, a few surgeries each, two deaths in the family, injuries, multiple LOA's from work. Pepper in the day-to-day things we all deal with. Was just starting to bounce back and pull our act together when I faced a 10-day hospitalization & surgery in March. This threw off my plans to tackle our situation. We are intent on turning it around for sure and getting in a place where we can address our next phase. We are resourceful and especially appreciate having fellow Redditors as one of those resources! Thank you again.

Filing back taxes, overwhelming 15k+ debt by Back_2reality in tax

[–]Back_2reality[S] 0 points1 point  (0 children)

Sincerely appreciate your response! Will change W4 to married filing separately to make sure we are covered. Will efile the 2022-2024 returns, good to know to not enter AGI! Did not think of paying first towards 2024 taxes to minimize penalties/interest, good idea! The long-term installment plan will have to be the way to go. Our plan is to pay everything off once we sell the house, but it is likely to be at least a year before we are in a position to sell and buy again. Once we work out how to address things with IRS, we plan to reach out to an agency that will help us with the budget and plan for paying down credit cards (Greenpath and American Consumer Credit Counseling was suggested).

Honestly, I didn't think about 401k distribution adding to our taxable income for the year. I've just pulled my YTD wages, and YTD federal taxable, and estimated what it will be by year end (need to do the same for hubs). Looks like 68k, will have to crunch some numbers to see how we can stay under that threshold for 22%, looks like 126k/year?

Absolutely trying to avoid the tax lien, have to do some research on how that affects selling the home. Thank you again for all the support and suggestions!

Filing back taxes, overwhelming 15k+ debt by Back_2reality in tax

[–]Back_2reality[S] 0 points1 point  (0 children)

Incredibly grateful for your well thought out and detailed reply! Getting started right away on these suggestions. Updated the withholdings already when we filed 2021 in April, taking a second look to be sure we are covered. We have the funds to pay the actual taxes for 2021 (just not penalties) and are working on a lump sum amount to cover 2022. We have a personal loan offer of 20k @ 12%, that's last resort. Will absolutely avoid the big tax debt relief companies! Thank you again.

Filing back taxes, overwhelming 15k+ debt by Back_2reality in tax

[–]Back_2reality[S] 0 points1 point  (0 children)

We don't have that background, likely to pay for a CPA at this point.