I owe the IRS

[greent]

I received a letter that I owe them for 2014. Its from a 401k that I cashed out when I left a job ( I regret doing that). I thought I had already payed the taxes when I withthrew the money but they are saying I owe them.I was planning on paying off my CC's by September 29. I have 1200 in CC debt. But the IRS really want their money so now is going to take longer to pay my CC. I have 0% interest  over in February for my Citi and April for Amex and Discover.I must pay them off before that time. Also DH has to go to Mexico in February and I need to save for his trip. I was going to save from October to February and now the IRS got in the way. Grrrrrr. 

[Appleman]

That unfortunately is one of the big mistakes people make, taking money from retirement. And unfortunately I did that long ago myself before I became a bit more money savvy.

The 10% penalty really kills you. If I recall I set up a low interest payment plan with the IRS that was not on my credit reports. You may want to investigate that option. A lien from the IRS on the other hand and you will take a huge hit on your score.

Good luck

[Anonymous]

I have owed and used a plan to pay and also spread across a couple of credit cards. So you do have options for paying. Good luck whatever you decide.

[Billybob_TX]

You can do a payment plan, probably online. Or you can visit a local office to set up a plan. I owe them a ton and have a payment plan in place, so no probs and everybody is happy

[silkysean]

No worries I was in your shoes for a even bigger amount $15,000 and made payment arrangements.Of course what they charge per month for making a electronic payment is Awful and credit card even worse plus interest.I just took a loan from Alliant for 2 years at a low rate and come off much cheaper and now no worries.Good luck Op

[sccredit]

https://www.irs.gov/individuals/payment-plans-installment-agreements

[George2037]

Check with the fund you cashed it out from.  

I cashed mine out once after leaving a short term employment, the IRS came back to me a few years later telling me I owed them money on taxes.  I too thought I had the taxes taken out when I cashed it out.  I checked with the fund I pulled it from and they verified that they did take taxes out but didn't report it to the IRS.  I got a copy of the check stub and the tax form from the fund and sent it into the IRS.  I paid a small $30-40 differance but all said and done it was quickly cleared up.

[Anonymous]

Been there. Done that. 

For me, it was about 8k. Have to say though, the IRS were very easy to work with and very accomodating. They appreciate willingness to pay. 

I believe if it is under 10k, they will alomost certainly let you do an installment plan. 

When I had mine, the interest was very low indeed compared to what I could have been paying on a commercial loan, even with penalties.

[Anonymous]

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@Appleman wrote:

That unfortunately is one of the big mistakes people make, taking money from retirement. And unfortunately I did that long ago myself before I became a bit more money savvy.

The 10% penalty really kills you. If I recall I set up a low interest payment plan with the IRS that was not on my credit reports. You may want to investigate that option. A lien from the IRS on the other hand and you will take a huge hit on your score.

Good luck

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Exactly my experience. It was really easy to set up too.