Solved

Spreading out tax payment on capital gains and 401K distributions?

Forum|Forum|4 years ago
March 6, 2022
1 reply
0 views

I took nearly $200k out of my IRAs and 401Ks last year due to my wife having terminal brain cancer. She passed away in November. I also sold our rental property (for a little over $300K capital gain) to pay off the mortgage on our current home. I'm retired with no debts.... should be great, right? Not so much. I completed my tax calculations using Turbo Tax and it shows that I owe over $70K in federal taxes and $25K in state taxes. I don't make nearly that much in a year on retirement. How can I spread that out or delay payment? Worst case is using a home equity loan or drawing even more from my 401Ks.

TurboTax Home & Biz Windows

Best answer by taxlady28

I am so sorry for your loss.

I would suggest you go through your return with a TurboTax Live expert or with a local tax preparer. They may find deductions that you missed.

You can set up an installment plan with the IRS. Hopefully a professional can help you reduce the amount that you owe.

If you owe $50,000 or less, the IRS will allow an installment agreement for up to 72 months.

If you owe more than $50,000, you must negotiate with the IRS. Do have a professional look at your return before you make any payment plan.
There may be some relief for you state taxes also. Each state has its own rules about payment.

T

taxlady28Answer

I am so sorry for your loss.

I would suggest you go through your return with a TurboTax Live expert or with a local tax preparer. They may find deductions that you missed.

You can set up an installment plan with the IRS. Hopefully a professional can help you reduce the amount that you owe.

If you owe $50,000 or less, the IRS will allow an installment agreement for up to 72 months.

If you owe more than $50,000, you must negotiate with the IRS. Do have a professional look at your return before you make any payment plan.
There may be some relief for you state taxes also. Each state has its own rules about payment.