Submitted by cleaningupmess2023 t3_127wq6i in personalfinance
Long time lurker, first time poster.
W2 employee (35% tax bracket) who, due to a few mistakes I made, find myself in a big hole with the IRS, to the tune of a 20K tax bill for this year.
Mistake 1 - I sold a property that was my primary home inside of two years to capitalize on the equity. I did not realize the impact that capital gain would have
Mistake 2 - I did not maximize my retirement savings (IRA or 401k contributions), and did not have enough withheld from my paycheck.
Liabilities:
Mortgage - Owe $272K, value roughly $280K, purchased 5/2022 (height of market)
Credit Cards - Owe $40K, 9.9 and 11.9%
Student Loans - Owe $34K, 5.75 and 13.4%
Auto Loan - Owe $17K, 6.25%, Value $18K
Assets:
Savings: $6K
Retirement: $19K
I attempted to take a loan out at my bank to handle the IRS debt, however I was denied. I do NOT want to do another withdrawal on my 401(k) if I can avoid it, and my plan does not allow loans (a family member suggested that).
plowt-kirn t1_jeg66sf wrote
Talk to the IRS. They are actually pretty reasonable and will put you on a payment plan.
And please do something about that credit card debt.