I took some money out of my retirement, and I am not yet 59. Because I had no idea I should have reported this as income, I now owe the IRS over $8000.
Should I take some more out of my retirement to pay this fee? I've made a payment arrangement with them, but it will take forever to pay it.
Any ideas are welcome!
Thu Mar 30, 2017 12:30 am
oldguy Senior Member
Cash: $ 718.00
Joined: 21 May 2006
quote: Should I take some more out of my retirement to pay this fee?
I'm surprised that your school's administrator didn't point that out to you and suggest a better plan for you. And at least warn you about the huge upcoming tax & penalty costs?
Borrow the $8000 elsewhere if possible. If you take it out of your retirement, you'll need to take roughly $12,000. The taxes & penalty on the $12,000 will roughly $4000 - and the remaining $8000 goes to the IRS to pay your first tax bill.
(The $12,000 will be part of your 2017 income so the $4000 tax won't be dues until April 2018.)