This past year I switched jobs to something that pays more. I was working 2 jobs for most of the year, and left to be full time at the higher paying one. Just started my taxes and between federal and state, I owe almost $3000 in taxes. That's about 2 months of pay for me, so I don't even think I'll be able to reasonably pay it. I am so dumb with finance stuff and was not expecting this at all. Is there anything I can do about this, any help I can get?? I'm pretty sure it's accurate since now that I'm looking over the forms, it seems like one of the jobs didn't withhold any federal taxes. Still- I feel like I'm too poor to have this amount randomly put on me. I have basically no savings and genuinely have no idea how I will be able to pay for this, so any help would be much appreciated.
I owe wayyyy more taxes than I can afford to pay
byu/idkdudeeeeee intax
Posted by idkdudeeeeee
8 Comments
FILE THE RETURN, first of all. The failure-to-file penalties are 10x more than the failure-to-pay penalties.
You can set up a payment plan with the IRS.
You also really should check your withholding at all jobs and make sure it’s set up properly. Every time you got a paycheck, all year, was another opportunity for you to notice the lack of withholding, and check your settings.
Definitely, definitely please still file your tax return. There are seperate penalties for not filing, and not paying, and the “you didn’t file” is, like … … worse.
Anyway, I’m not familiar with the *specific* order of operations, but you can set up a payment plan : [https://www.irs.gov/payments/online-payment-agreement-application](https://www.irs.gov/payments/online-payment-agreement-application)
My general understanding is that a lot of people will wait until the IRS sends them their first “um please pay us your taxes” notice, and the return has already finished processing, but if you can pay *anything* earlier, it only helps to do so, to reduce penalty and interest.
Your state almost certainly will allow you to set a payment plan up with them, too.
So,
* FILE
* set up both a federal and a state payment plan that you can manage
* moving forward, just double check your W-4 at your current job. Your jobs don’t know your full income situation, so they only withhold based on the information you *give* them, really. If you keep this same job the entire year you’ll probs be set up to be break-even around tax time, or pretty close, but it never hurts to check.
Make sure your taxes are being done properly.
As others have said, file your return and then worry about paying later. You can set up a payment plan on line. Make sure your W4 is correct and you are withholding property now. I know it’s overwhelming but it’s not the end of the world. Interest rate for the IRS is 7%. That’s far better than credit card interest rates.
Were you self-employed last year? If you just had W2 jobs and made about $18K to $20K for the year (based on $3K being 2 mths of pay), then owing $3K in tax makes no sense whatsoever. Approximately what was your gross wages?
As others stated it’s really not a big deal, just make sure you file in time or at least file an extension and then if you can’t pay just get on a payment plan. It’ll cost you a little more but much less than not filing as the penalties will be much higher.
Take some personal responsibility. Pay attention to filing a W-4. Clearly you can pay less than 10% of your income if you would have paid attention. It is not that hard to spend a couple of hours figuring out your situation.
Whenever you take a new job after already having been at one during that year, you need to check the box that says you have two jobs or your spouse has a job, something like that, on your W-4. Otherwise, they assume you haven’t made any money that year and start you off with the lowest withholdings. You’re not the only one, we had someone come in the other day that owed $2500 for the same reason, 4 W-2’s. File your taxes and ask for a payment plan. The minimum is $25 per month, but you need to have the debt paid within 72 months, so you would have to pay more (if exactly $3000 then $42/month).