The Taxman Cometh
According to H&R Block's website, the IRS considers you divorced for the entire year within which you got divorced. So, when you file your tax return, you only get credit for yourself for the year. I got divorced in November. That means that the exemptions I claimed for Kay and Misty do not apply, starting in January. Without those exemptions, I paid too little in taxes for 10 months. I now over $7000 in back taxes.
On top of taking a $500 monthly pay cut (because of the fewer exemptions), I now will have to pay the IRS back taxes. My initial research shows that the IRS may allow me to pay it back over as long as three years. That's about $200 a month, not including whatever interest and penalties they charge me. I have no idea what those could be.
Assuming the best case scenario, I'm now going to be taking home $700 less a month. That's a lot. I'm going to talk to an H&R Block tax specialist today, to see what my options are. I don't think I'll get away with paying less, but I want to make sure that I cover every eventuality and know all my options.
On top of taking a $500 monthly pay cut (because of the fewer exemptions), I now will have to pay the IRS back taxes. My initial research shows that the IRS may allow me to pay it back over as long as three years. That's about $200 a month, not including whatever interest and penalties they charge me. I have no idea what those could be.
Assuming the best case scenario, I'm now going to be taking home $700 less a month. That's a lot. I'm going to talk to an H&R Block tax specialist today, to see what my options are. I don't think I'll get away with paying less, but I want to make sure that I cover every eventuality and know all my options.
Labels: Money
posted by Sharp @ 11:42 AM
2 Comments:
At 8:26 PM,
Titan_X said…
Ouch, that's rough! Have you contacted the IRS? It better you play your cards safe when it comes to taxes. You may be able to apply for a penalty abatement, though there's a slim chance.
I would seriously look into a possible discount, since you were married 11 of the 12 months of 2008. I'm sure there's something that can be done about your exorbitant tax penalty.
I'd strongly recommend speaking with a financial adviser or a tax attorney... anyone who can give you some insight into a way out.
At 8:19 AM,
Sharp said…
Thanks for the advice, but I already looked into it. I spoke to a financial advisor, and there's nothing I can do.
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