A couple I know were recently divorced, but since they were still
married on 12/31/2023, their settlement agreement requires them to
file a joint tax return for 2023 and to split any refund or costs
50-50. I just did a run-through on their taxes, and it turns out they
will owe around $7000 together, which means each of them will owe
$3500 according to their commitment in the divorce agreement. It
appears that one or perhaps both of them will have trouble coming up
with these amounts by April 15th. What options do they have in the
following scenarios?
Scenario 1: One party can pay the $3500 but the other cannot. Will
the IRS accept a partial payment of the $3500 from the person who can
pay and then set up a payment plan with the other party for the
remaining amount? If the second party defaults, can the IRS come after
the party was able to pay their half? Remember, that person fulfilled
their obligation under their divorce agreement.
Scenario 2: If neither party can pay the full amount, can they each negotiate a separate payment plan with the IRS or do they have to work together on this and have the same terms?
Three other questions:
1) What are the general options available when someone can't pay
their taxes on time? The IRS website references a 180-day payment
plan and then some kind of longer term plan, but it doesn't state what
term or terms are available.
2) How does IRS determine the interest and penalties that are owed
under these plans?
3) If the parties determine that they can't pay the total by April
15th and have to go on a payment plan, is there any value at all in
getting a filing extension to October 15th? Since all calculations
are based on the April 15th date anyway, I'm not sure what value there
would be in doing an extension.
"Fred" <fred1@NOSPAMgmail.com> wrote in
news:utfd1n$1lnhu$1@dont-email.me:
A couple I know were recently divorced, but since they were still
married on 12/31/2023, their settlement agreement requires them to
file a joint tax return for 2023 and to split any refund or costs
50-50. I just did a run-through on their taxes, and it turns out they
will owe around $7000 together, which means each of them will owe
$3500 according to their commitment in the divorce agreement. It
appears that one or perhaps both of them will have trouble coming up
with these amounts by April 15th. What options do they have in the
following scenarios?
Scenario 1: One party can pay the $3500 but the other cannot. Will
the IRS accept a partial payment of the $3500 from the person who can
pay and then set up a payment plan with the other party for the
remaining amount? If the second party defaults, can the IRS come after
the party was able to pay their half? Remember, that person fulfilled
their obligation under their divorce agreement.
Scenario 2: If neither party can pay the full amount, can they each
negotiate a separate payment plan with the IRS or do they have to work
together on this and have the same terms?
Three other questions:
1) What are the general options available when someone can't pay
their taxes on time? The IRS website references a 180-day payment
plan and then some kind of longer term plan, but it doesn't state what
term or terms are available.
2) How does IRS determine the interest and penalties that are owed
under these plans?
3) If the parties determine that they can't pay the total by April
15th and have to go on a payment plan, is there any value at all in
getting a filing extension to October 15th? Since all calculations
are based on the April 15th date anyway, I'm not sure what value there
would be in doing an extension.
Others will know the answers to those questions better than I do. But I
do have one observation. Just because the divorce decree requires them
to file jointly, if they both agree, they don't have to. If filing >separately would result in lower tax they should consider that. They can >still both pay half the total, even if filing separately would result in >different amounts being owed by each.
"Stuart O. Bronstein" wrote in message news:XnsB13B8A612D27Cspamtraplexregiacom@130.133.4.11...they
"Fred" <fred1@NOSPAMgmail.com> wrote in
news:utfd1n$1lnhu$1@dont-email.me:
A couple I know were recently divorced, but since they were still
married on 12/31/2023, their settlement agreement requires them to
file a joint tax return for 2023 and to split any refund or costs
50-50. I just did a run-through on their taxes, and it turns out
afterwill owe around $7000 together, which means each of them will owe
$3500 according to their commitment in the divorce agreement. It
appears that one or perhaps both of them will have trouble coming up
with these amounts by April 15th. What options do they have in the
following scenarios?
Scenario 1: One party can pay the $3500 but the other cannot. Will
the IRS accept a partial payment of the $3500 from the person who can
pay and then set up a payment plan with the other party for the
remaining amount? If the second party defaults, can the IRS come
fulfilledthe party was able to pay their half? Remember, that person
worktheir obligation under their divorce agreement.
Scenario 2: If neither party can pay the full amount, can they each
negotiate a separate payment plan with the IRS or do they have to
whattogether on this and have the same terms?
Three other questions:
1) What are the general options available when someone can't pay
their taxes on time? The IRS website references a 180-day payment
plan and then some kind of longer term plan, but it doesn't state
thereterm or terms are available.
2) How does IRS determine the interest and penalties that are owed
under these plans?
3) If the parties determine that they can't pay the total by April
15th and have to go on a payment plan, is there any value at all in
getting a filing extension to October 15th? Since all calculations
are based on the April 15th date anyway, I'm not sure what value
Iwould be in doing an extension.
Others will know the answers to those questions better than I do. But
cando have one observation. Just because the divorce decree requires them
to file jointly, if they both agree, they don't have to. If filing >>separately would result in lower tax they should consider that. They
instill both pay half the total, even if filing separately would result
different amounts being owed by each.
That's an interesting suggestion, but when I ran the numbers with each
person filing separately, the total tax bill was the same as with joint filing. That's probably because their individual incomes and even withholding amounts were fairly close to one another.
"Fred" <fred1@NOSPAMgmail.com> wrote in news:utfj39$1n77i$1@dont-
email.me:
"Stuart O. Bronstein" wrote in messagethey
news:XnsB13B8A612D27Cspamtraplexregiacom@130.133.4.11...
"Fred" <fred1@NOSPAMgmail.com> wrote in >>>news:utfd1n$1lnhu$1@dont-email.me:
A couple I know were recently divorced, but since they were still
married on 12/31/2023, their settlement agreement requires them to
file a joint tax return for 2023 and to split any refund or costs
50-50. I just did a run-through on their taxes, and it turns out
afterwill owe around $7000 together, which means each of them will owe
$3500 according to their commitment in the divorce agreement. It
appears that one or perhaps both of them will have trouble coming up
with these amounts by April 15th. What options do they have in the
following scenarios?
Scenario 1: One party can pay the $3500 but the other cannot. Will
the IRS accept a partial payment of the $3500 from the person who can
pay and then set up a payment plan with the other party for the
remaining amount? If the second party defaults, can the IRS come
fulfilledthe party was able to pay their half? Remember, that person
worktheir obligation under their divorce agreement.
Scenario 2: If neither party can pay the full amount, can they each
negotiate a separate payment plan with the IRS or do they have to
whattogether on this and have the same terms?
Three other questions:
1) What are the general options available when someone can't pay
their taxes on time? The IRS website references a 180-day payment
plan and then some kind of longer term plan, but it doesn't state
thereterm or terms are available.
2) How does IRS determine the interest and penalties that are owed
under these plans?
3) If the parties determine that they can't pay the total by April
15th and have to go on a payment plan, is there any value at all in
getting a filing extension to October 15th? Since all calculations
are based on the April 15th date anyway, I'm not sure what value
Iwould be in doing an extension.
Others will know the answers to those questions better than I do. But
cando have one observation. Just because the divorce decree requires them >>>to file jointly, if they both agree, they don't have to. If filing >>>separately would result in lower tax they should consider that. They
instill both pay half the total, even if filing separately would result
different amounts being owed by each.
That's an interesting suggestion, but when I ran the numbers with each
person filing separately, the total tax bill was the same as with joint
filing. That's probably because their individual incomes and even
withholding amounts were fairly close to one another.
So filing separately may solve the problems, and each can make their own >payment arrangement.
If the second party defaults, can the IRS come after the party was able to >pay their half? Remember, that person fulfilled their obligation under
their divorce agreement.
3) If the parties determine that they can't pay the total by April 15th and >have to go on a payment plan, is there any value at all in getting a filing >extension to October 15th?
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