Today TaxMama hears from Cathy in Arizona, in despair. “I was laid off from a job after over 18 years. I had a 401K loan that I was paying through my paycheck. It became due in full. There was no way for me to pay. Now I owe a tax debt I also cannot pay. What do I do?”
I wish I had some good news for you. Unfortunately, I cannot think of a thing.
This is the kind of thing that you need to sort out BEFORE leaving the job. When you’ve been on a job for that long, surely the owners or officers of the company – or human resources, in really large companies, might have been willing to sit down with you and find a way to help you out – if only you had asked.
TaxMama’s philosophy is “It never hurts to ask. But nothing happens if you don’t ask.”
One of the things they might have helped you with is a loan on your home to help you pay back the 401k money. Or even a loan from the company itself? Believe me, guilt can work wonders if properly applied.
Now…the only things I can suggest is to either:
1) ask IRS for an installment agreement (Form 9465) http://www.irs.gov/pub/irs-pdf/f9465.pdf , or
2) If you’re not earning anything at all right now, ask IRS for a hardship hold on your account.
IRS Commissioner Doug Shulman announced early this year that his staff has been instructed to help people – if only you call them.
And remember, you can find answers to all kinds of questions about owing IRS and other tax issues, free. Where? Where else? At TaxMama.com
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