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Pit Accountants: Tax Liability Question

RaleighDeacon

RaleighDeacon

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Almighty Pit of knowledge. I have a quick question for the accountants among us, if anyone is actually on here the week prior to tax deadline...

PM me for details please. Short version is I have to pay a large lump sum to the IRS and I need to know where my cutoff is for it making more sense to just enter into a payment agreement with Uncle Sam or scramble to find a way to pay it all at once, etc.

Tag away haters.

This is not Wesley Snipes.

#selfemploymentsuckssometimes
 
My advice in the future would be to make quarterly estimated tax payments so that this doesn't happen again.
 
the interest rate and underpayment rate that they charge is actually fairly low. A payment agreement is a fairly reasonable way to work it out and they are okay to work with - so long as you make the payments. PM me if you want to discuss.
 
DeacDiggler said:
the interest rate and underpayment rate that they charge is actually fairly low. A payment agreement is a fairly reasonable way to work it out and they are okay to work with - so long as you make the payments. PM me if you want to discuss.
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PM Sent. Thanks!
 
Can PM me. Just file even if you don't make the payments and you'll save a ton.
 
RaleighDeacon said:
Almighty Pit of knowledge. I have a quick question for the accountants among us, if anyone is actually on here the week prior to tax deadline...

PM me for details please. Short version is I have to pay a large lump sum to the IRS and I need to know where my cutoff is for it making more sense to just enter into a payment agreement with Uncle Sam or scramble to find a way to pay it all at once, etc.

Tag away haters.

This is not Wesley Snipes.

#selfemploymentsuckssometimes
Click to expand...

You can also file an extension. Great that you have a huge tax bill, @ least you made some good $$$; congrats! If you anticipate the funds continue to flow, I would do as another posted and file quarterly estimates...
 
When you file an extension you have to make an estimated payment.
 
6 month automatic extension pushes the new deadline to October 15.
 
I never knew extensions were possible and so common. Over the past month, I've had at least 5 people tell me they were filing an extension on either their personal or business taxes.
 
You don't have to make an estimated payment when you file your extension. You can but the extension is automatic. Filing your return on time or by the extended due date with an extension will save you from any late filing penalties, but neither will stop late payment penalties or interest.
 
WakeGal said:
I never knew extensions were possible and so common. Over the past month, I've had at least 5 people tell me they were filing an extension on either their personal or business taxes.
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Most big corporations rarely file their returns by the original due date. They are almost always extended.
 
ChrisL68 said:
You don't have to make an estimated payment when you file your extension. You can but the extension is automatic. Filing your return on time or by the extended due date with an extension will save you from any late filing penalties, but neither will stop late payment penalties or interest.
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True. You don't have to but you're going to incur penalties and interest. Depending on the size of the bill that can be a significant number.
 
WakeGal said:
I never knew extensions were possible and so common. Over the past month, I've had at least 5 people tell me they were filing an extension on either their personal or business taxes.
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For a lot of people with alternative investments, it is virtually impossible for them to file on time. Most of the time, they don't get their K-1s until well after April 15. I think it would be an overstatement to say that only a handful of my clients are April 15 filers.
 
This year is also complicated by the fact so many people made gifts last year. If you're trying to get appraisals and all of that done then April 15 comes pretty quickly.
 
Yea, if the Partnership or S Corp you are an owner of extends, you really have no choice but to do so.
 
ChrisL68 said:
You don't have to make an estimated payment when you file your extension. You can but the extension is automatic. Filing your return on time or by the extended due date with an extension will save you from any late filing penalties, but neither will stop late payment penalties or interest.
Click to expand...

We almost never need to make estimated gift tax payments for clients who extend because, well, no one really ever paid gift tax. Since people wanted to lock in the 35% rate last year, we had a number of clients who are going to have to pay. I just coordinated a deposit of $11.2 million into our escrow account to make a payment with the extension we are filing. On top of that, the client triggered about $25 million of gain (at 2012 rates) to have high basis assets to gift, so she also has another $5 million or so in cap gains to pay (state and fed). Needless to say, this was an important one to make sure the payment is made with the extension.
 
Wakelaw2006 said:
We almost never need to make estimated gift tax payments for clients who extend because, well, no one really ever paid gift tax. Since people wanted to lock in the 35% rate last year, we had a number of clients who are going to have to pay. I just coordinated a deposit of $11.2 million into our escrow account to make a payment with the extension we are filing. On top of that, the client triggered about $25 million of gain (at 2012 rates) to have high basis assets to gift, so she also has another $5 million or so in cap gains to pay (state and fed). Needless to say, this was an important one to make sure the payment is made with the extension.
Click to expand...

Yeah. Those penalties and interest add up quickly...
 
ChrisL68 said:
Yea, if the Partnership or S Corp you are an owner of extends, you really have no choice but to do so.
Click to expand...

For the tax ignorant (this is why I have my accountant) what are extends and what does this mean?
 
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