Running out of time, don't have money to pay for taxes

[takeDonC]

To make a long story short I experienced a combination of the following in the past year:


-Put down payment on house
-Put down payment on car
-Paid for year's worth of college
-Paid for year's worth of mortgage
-Paid for year's worth of car payment
-I went on a huge upswing, then a huge downswing
-I took a lot of time off from playing poker b/c of personal life
-Paid bills while I stopped making income
-I made about the same amount in 06 as I did in 05. I had to pay $13,000 (didn't have my own house then)
-After paying off bills for the month of April, I'll be left with: ~$1500

Option 1: Sell car (worth ~$40k, ~$25k left on loan), use $~$15k profit towards paying taxes (selling car could take a while). Use any leftovers for playing poker. Start low and rebuild.

Option 2: Sell car, use ~$15k profit as a steady BR and play tons of hands to try to come up with money to pay for taxes and have a little leftover for a BR (My 2 year average $/hr is ~$100)

Option 3: Keep car, borrow $~15k from rich cousin and pay taxes. Use any leftovers for playing poker. Start low and rebuild.

Option 4: Keep car, borrow $~15k rich from cousin and play poker with decent BR

Optoin 5: Don't pay taxes for poker/Pay late.


I would like to keep house, so I do not want to sell it.
I would like to keep car, but it is a very impractical sports car. I don't need it much since I play poker for work and walk to school.
If I borrow money from cousin, I would like to offer him a good % interest.
I am confident if I had $15k either from selling car or from borrowing money from cousin, I could make another $15k in one month.


I know I practiced irresponsible financial planning and financial management. Please spare the lectures and berating. I am looking for advice. Any other possible options that are better than the existing ones are welcome.

Thank you all in advice.

[Fat Nicky]

i don't know any specifics about this, but i'd look into filing an extension on paying owed taxes. i think this gives you until around october...i could be way off though.

[Better Than U]

You do know you're not required to pay taxes, right?

[NU Star]

You're only paying $13,000 in taxes but you plan on earning $15,000 in a month? [img]/images/graemlins/confused.gif[/img]

[Harv72b]

[ QUOTE ]
You do know you're not required to pay taxes, right?

[/ QUOTE ]

Yeah. If you don't pay 'em & they catch you, the gov't even gives you a rent-free place to live, plus pays for food & even clothing. I don't think they have high speed internet there, though.

[Push_Fold]

Just conatact IRS and set up payment plan.

[sarahbellum]

[ QUOTE ]
i don't know any specifics about this, but i'd look into filing an extension on paying owed taxes. i think this gives you until around october...i could be way off though.

[/ QUOTE ]

If you file an extension, you are required to pay estimated taxes at the time you file the extension.

[elena_elphie]

The only consequence to paying your taxes a few months late is that the IRS will charge you interest and penalties that I think add up to around 14%/year right now. So if that is the lesser evil don't worry about it. They will start sending you bills, and if you need a long time to pay you should set up a formal installment plan, but if it is just a few months then it won't be a big deal, I'm sure they're happy to collect their interest.

Just be sure to file (at least for an extension if nothing else) There is a much large penalty if you don't file of 5% / month.

[kcheel]

As others have already said, just file an extension. Or just set up a payment plan. Or both.

As far as a payment plan, you can basically tell them what you want to pay each month and as long as its not extremely low, they will accept it.

I was self employed one year and didn't pay any estimated taxes the entire year. When tax time rolled around the next year, I owed 5k in taxes. I set up a payment plan of $400/month and paid it off over the next year.

Yes, you will pay some interest and some minor penalties for not paying enough in to start with but its not an obscene amount.

[MJL]

File your tax return by April 15 and send in what you can. It is wise even if you don't send any money with the return. They will send you a bill in late May or June. It will include a penalty and interest. Setting up a plan at that time will be an option.

Selling your car is an option but I see you have not listed paying taxes with the equity as an option. It would be better to do that then buy a modest car on a lower interest car loan. It will be much better than the IRS interest and penalties. Getting behind with the IRS will snow ball. You could end up with a lein on your house. This will hurt if you need to sell regardless if you don't have any equity. Your credit score will drop and look terrible with a government lein on it.

Start paying taxes quarterly or even monthly to get in the habit so you don't get behind. If you continue to make decent money in poker you will have to file like a small buisness and there are penalties for not filing quarterly.

Stop taking time off. If you worked a job you couldn't do that. You must work thru your personal problems no matter how hard. Playing poker for a living is the same as running a small business with the freedoms but a job with the work.

Start saving money in a retirement account instead of quick gratification purchases. Nobody (important) gets impressed with purchases. They quickly figure out if you are flashing and have nothing behind it.

Use an accountant to help you. Not a tax preparer.

Use this as a learning experience.

Good luck