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I owe back taxes...am I screwed?

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Anonymous
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I owe back taxes...am I screwed?

The wife and I are hoping to buy a home early next year.  Her credit is great, 740 or so.  I don't have a FICO score right now, but she's added me as an AU to her Discover and Zales card.  I have been approved for a secured Capital One card, and I've opened a Fingerhut account and will order something modest and pay it off.  I have four accounts showing in collections, two medical bills and two others that we are paying off soon, so I'm not worried so much about that stuff.  What I am worried about is my back taxes.  The past few years I had a bad habit of not having enough taxes withheld from my check (dumb decision on my part) and now I owe over 8K.   I have been on an installment plan for about 2 years and haven't missed a payment.  I figure I will probably owe more next year Smiley Sad  But other than that, I have no other debt.  Together, our total debt is around 30000, counting my (projected) back taxes, her debt and the rest of her auto loan.  Together we make about 100k a year.  I'm worried that once I get a decent credit score built up, we'll still get denied due to my back taxes.  I hate the fact that my past poor financial choices are holding her back and I'm trying really hard to make up for it now.

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Anonymous
Not applicable

Re: I owe back taxes...am I screwed?

I also forgot to mention...there is a state tax lien on my credit report, but it shows as paid and released.  I actually never owed anything at all.  The state believed I owed like 4k in unfiled back taxes.  They filed a lien before I found out what exactly was going on, then I provided proof that I never resided or worked in the state for the year in question and they released it.

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Anonymous
Not applicable

Re: I owe back taxes...am I screwed?


@Anonymous wrote:

The wife and I are hoping to buy a home early next year.  Her credit is great, 740 or so.  I don't have a FICO score right now, but she's added me as an AU to her Discover and Zales card.  I have been approved for a secured Capital One card, and I've opened a Fingerhut account and will order something modest and pay it off.  I have four accounts showing in collections, two medical bills and two others that we are paying off soon, so I'm not worried so much about that stuff.  What I am worried about is my back taxes.  The past few years I had a bad habit of not having enough taxes withheld from my check (dumb decision on my part) and now I owe over 8K.   I have been on an installment plan for about 2 years and haven't missed a payment.  I figure I will probably owe more next year Smiley Sad  But other than that, I have no other debt.  Together, our total debt is around 30000, counting my (projected) back taxes, her debt and the rest of her auto loan.  Together we make about 100k a year.  I'm worried that once I get a decent credit score built up, we'll still get denied due to my back taxes.  I hate the fact that my past poor financial choices are holding her back and I'm trying really hard to make up for it now.


You're not screwed. Disclose your monthly payment to your LO and it'll be factored into your DTI. Your fate is  more likely to be determined by your credit score once that comes in. Back taxes aren't a deal killer, but federal tax liens are a very bad look. If that state tax lien is paid and released, I'd fight to have it removed if that's possible. If it was filed in error, it shouldn't be on your credit report.

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Mythic850
Contributor

Re: I owe back taxes...am I screwed?

As SouthEast80 pointed out:  If it was filed in error, it shouldn't be on your credit report.

 

Contact the state agency and get them to withdraw the lien. 

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