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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13339
Experience:  15years with H & R Block. Divisional leader, Instructor
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I'm 62 years old, married, and had a major job change a

Customer Question

I'm 62 years old, married, and had a major job change a little over a year ago. This caused me to run through all our savings and also withdraw a large portion of my IRA savings. As you know, I had to add the IRA distribution as income and I ended up paying over $40k in taxes for 2015 which as I said is equivalent to 80% of my entire annual salary.
I ended up taking a large distribution from my IRA to cover that and other expenses. Obviously, that will now put us in the same position come next April. The only way I'll be able to cover the $35k in taxes next April is if I take the proceeds from our home that we just sold. We initially planned to sell it so we could buy a cheaper house but we wont be able to do that if I take the proceeds to pay the taxes we'll owe for 2016. My question is if we use the home proceeds to buy a smaller home as planned, and pay off the IRS over the next year or so,will the IRS do more than place a lien on the new house? Are there any other options available that I'm not aware of for my situation? Any thoughts, input, advice on this would greatly be appreciated.
Thanks,
Jay
Submitted: 5 months ago.
Category: Tax
Expert:  Robin D. replied 5 months ago.

Hello

The IRS would allow you to pay in installments and even though they do place a lien on property until the debt is paid off it is an option that allows you to use your funds for a home.

An installment agreement would mean additional interest.

You could perhaps look to making estimated payments so your balance due is smaller when you file your return. If you could do that for the remaining portion of this year that would at least lessen the balance due.

The other option is to request to have more withholding each pay period. The W4 has a place to request an additional amount. This would mean less take home but it would also reduce your balance due when you file the return.

It is good that you are looking ahead for this.

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Expert:  Robin D. replied 5 months ago.

Checking to see if you responded

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