Follow Up: Husband's Surprise Debts

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Meg77
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Re: Follow Up: Husband's Surprise Debts

Post by Meg77 » Wed Dec 04, 2019 10:36 am

stanford73 wrote:
Sun Nov 24, 2019 4:42 pm
[In order to best assist the member, replies which bring up non-financial issues will be removed. --admin LadyGeek]

I have a question on the HELOC. Although my signature is on the initial paperwork, why is it that US Bank would allow my husband only to withdraw money? Shouldn't they require approvals from both signers on the HELOC?
I'm a banker and just want to answer this question. When we close a HELOC to joint borrowers, there is a document you both sign per regulations (I want to say they are federal regs, but I am in TX for the record so it's possible it's a TX reg) that says you agree to allow EITHER party to withdraw or that you require BOTH parties to withdraw and manage the line.

The vast majority of people opt for either/or, just like a joint checking account works. It's simply a hassle to contact both parties to approve every check or transaction. However you can set it up that way and may be able to change how it's set up now. In our case I had a client recently ask to remove his spouse from the approval process since it had become cumbersome for both of them to have to call or email to approve every draw request. We had them sign an updated form saying they wanted to change that, and similarly we could modify the procedure to require both parties to sign or verbally approve if someone asked. Not every bank may be so willing to do that of course, but you can certainly ask.
"An investment in knowledge pays the best interest." - Benjamin Franklin

Topic Author
stanford73
Posts: 110
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 10:38 am

Katietsu wrote:
Wed Dec 04, 2019 10:21 am
The CPA presumably is aware of the IRS debt. Could you present the question about paying current taxes vs old credit cards to the CPA? If the CPA concurred that your priority should be current taxes over credit cards, your husband might be more willing to change his position.
Good idea! Thanks.

delamer
Posts: 9299
Joined: Tue Feb 08, 2011 6:13 pm

Re: Follow Up: Husband's Surprise Debts

Post by delamer » Wed Dec 04, 2019 10:41 am

stanford73 wrote:
Wed Dec 04, 2019 10:14 am
delamer wrote:
Wed Dec 04, 2019 10:06 am

Think about two things that you said above:
ll controls what gets paid.”

It sounds as if you are tinkering around the edges with cutting the budget, but not addressing the underlying financial problems.
I don't know what you mean by "not addressing the underlying financial problems." What else do I need to do if not cut expenses and increase income?
If he “still controls what gets paid” and continues to operate with “business-as-usual” then you aren’t making changes that will get you where you need to be in the long run financially.

You both need to buy into a new way of financial life. Two people got you into this mess, and just one can’t get you out of it.

EnjoyIt
Posts: 2870
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Re: Follow Up: Husband's Surprise Debts

Post by EnjoyIt » Wed Dec 04, 2019 10:45 am

stanford73 wrote:
Wed Dec 04, 2019 10:00 am

Tough sell to DH, who wants to payoff CC debt first.
This is a math problem. Since he has an MBA, then show him the math in a spreadsheet. MBA people love spreadsheets. Just look at the difference between not paying the IRS on time and incurring a penalty plus interest vs paying down the debt. If the penalty is steep enough then you are right. If the penalty is low, then he is correct.

this is from the intuit web site:
"The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%. If you file more than 60 days after the due date, the minimum penalty is $210 or 100% of your unpaid tax, whichever is less.May 24, 2019"
https://www.google.com/url?sa=t&rct=j&q ... ba3YNl0b0T

Seems to me that 25% is higher than your credit card debt so show him that.

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 10:48 am

Meg77 wrote:
Wed Dec 04, 2019 10:36 am
stanford73 wrote:
Sun Nov 24, 2019 4:42 pm
[In order to best assist the member, replies which bring up non-financial issues will be removed. --admin LadyGeek]

I have a question on the HELOC. Although my signature is on the initial paperwork, why is it that US Bank would allow my husband only to withdraw money? Shouldn't they require approvals from both signers on the HELOC?
I'm a banker and just want to answer this question. When we close a HELOC to joint borrowers, there is a document you both sign per regulations (I want to say they are federal regs, but I am in TX for the record so it's possible it's a TX reg) that says you agree to allow EITHER party to withdraw or that you require BOTH parties to withdraw and manage the line.

The vast majority of people opt for either/or, just like a joint checking account works. It's simply a hassle to contact both parties to approve every check or transaction. However you can set it up that way and may be able to change how it's set up now. In our case I had a client recently ask to remove his spouse from the approval process since it had become cumbersome for both of them to have to call or email to approve every draw request. We had them sign an updated form saying they wanted to change that, and similarly we could modify the procedure to require both parties to sign or verbally approve if someone asked. Not every bank may be so willing to do that of course, but you can certainly ask.
Thanks--that's very helpful. The HELOC is maxed out--$80k all withdrawn without my knowledge or approval. And, yet, I'm responsible for half that debt now. Since my name is on the HELOC, one would think a co-signer at the very least would be notified of any withdrawals, but I understand the law/rules don't automatically allow for that. Then again, I never expected DH to access that equity line without my approval.

I'll check with US Bank to see if the paperwork can be changed. Thanks, again.

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 10:49 am

Sorry, duplicate post.
Last edited by stanford73 on Wed Dec 04, 2019 11:01 am, edited 1 time in total.

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JAZZISCOOL
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Location: Colorado - 5,700 ft.

Re: Follow Up: Husband's Surprise Debts

Post by JAZZISCOOL » Wed Dec 04, 2019 10:50 am

goodenyou wrote:
Wed Dec 04, 2019 9:55 am
stanford73 wrote:
Wed Dec 04, 2019 12:31 am
Cubicle wrote:
Fri Nov 29, 2019 11:54 pm
I think OP should not sell their house. Another poster succinctly stated, qualifying for a mortgage, the stress of selling, the stress of buying, the stress of moving... I don't think it would end well.

I do commend OP for making such progress from the original thread to now. And being persistent enough to get her spouse to realize what is happening.

Even though OP said water usage has remained the same... As another poster stated to check the unit pricing, but I'm still suspicious for a leak. Most water meters have a "leak wheel" (or some other name). Tiny wheel/dial that spins even with minimal use, specifically to check for tiny leaks in the system. If OP can see the water meter, assess if there is any water being used when there should not be.

I highly recommend a cheaper mobile phone plan. I am splitting a Tmobile 55+ plan with my mother.

https://www.t-mobile.com/cell-phone-pla ... ount-plans

I see you listed 3 lines. Get the 2 line plan (only one person has to be over the age of 55), & one of your current lines just has to go onto a prepaid $30-40/month plan. Lots to choose from. If there are phones being financed, trade for credit from any of the major manufactures. Obviously dependent on your location & coverage. But there are much cheaper options from all the companies.

Comcast is a soul money drain. Depending on your location, get an internet only plan & drop TV. Get a TV streaming plan, Amazon, Netflix, etc... $247/month... Nothing on TV is worth that. Nothing.

I don't know your location or driving history, but I think your auto insurance could be lower. $1,620 per year for 2 cars. Paid off at that. How recent ago did you comparison quote? 10 minutes from 2 different companies... At least to confirm you're getting decent rates.

Also chiming in that the IRS is nice if you don't add any more delinquencies. 2020 > 2019 > prior year taxes. But make the payments faithfully. I have a close family member who is behind on taxes. Their IRS agent stated the same, don't fall behind on anything new. We will work out a plan for the past. And notify them if you cannot stay current! If you give them a heads up, they are much more flexible.

But based on everything I've read, OP is very capable of pulling through this. The income is there, the spending can be cut. Just combine the 2 & give it time.

My mother was able to get a zero percent for 18 months balance transfer check from one of her credit cards recently. There was a 4% transaction fee. I do not think you should move your credit card balances to any kind of secured loan. But I would explore the possibility of moving your higher interest cards to a lower interest card(s), for simplicity & interest savings (Capital One 24.40% --> US Bank 13% (or zero % if you get a promo deal)). If & only if, the time you anticipate needed to pay off the higher interest cards would be worth a balance transfer fee.
Thanks for all the great advice & encouragement.

I looked into both t-mobile for the phones and cutting the Comcast cord. YouTubeTV is rated highly by PC Magazine & is priced at $50/month. Checking on internet providers to get pricing there. Switching to T-Mobile for the two lines is in process.

DH just switched auto insurance--we'd been paying $1858. But, one car is 19 years old & the other 10 years old. Still seems like a lot of money for insurance, doesn't it? Our driving records are perfect.

DH and I had another budget meeting with much more detail on where we're spending our money. Beyond the high utilities, what jumped out was food and dinners out. Here's the expenses for Jan-Nov 2019:

Auto insurance $1858
Auto gas $676.38
Cable/internet $2390.65
Cell phones $2883
Dental $2133
Dogs-Vet $308.64
-Chewy $543.28
Dinners out $6111.53
Groceries $9086.86
Lawn $680.00
Healthcare $1205.79
CC Interest $2225.02
IRS $39, 340
HOA dues $636.00
Life Ins $4040.19
Housecleaning $2447.00 (now gone)
Mortgage $39,180.42 (3561.00/month)
Netflix $157.90
Home Depot $534.00
Travel $396.83
Electric $2057.41
Water $2790.37
Gas $621.81
_______________________________________
$123, 545


Water Bill Breakdown
Jan 55.22
Feb 55.22
Mar 74.17
Apr 74.17
May 126.98
June 163.48
July 421.65
Aug 658.11
Sept 624.33
Oct 522.99

Nov 88.22
Did you have a leak? I hope you called a plumber.
It seems the high water usage is related to your lawn sprinkler system. That is excessive as others have posted. 1) Many water districts in Colorado recommend ONLY watering 3 days per week because of our water issues as a state and the climate. 2) You need a reliable landscape person to evaluate the sprinkler system in the spring to check for leaks. Especially if you house is older than 10 years old, these are very common. The winter months look more normal (ish). You can set your sprinkler system to follow the guidelines for your water district (e.g. max 3 days/week). Not much you can do about this now if you have blown out your sprinkler system and the ground is frozen.

I know some people love their green lawns but over-watering is bad for the state's water supply and your water bills. :)

Example from Denver Water (which services many suburbs)

Summer watering rules are in effect May 1 to Oct. 1.

Water during cooler times of the day — lawn watering is not allowed between 10 a.m. and 6 p.m.
Water no more than three days per week.
Do not allow water to pool in gutters, streets and alleys.
Do not waste water by letting it spray on concrete and asphalt.
Repair leaking sprinkler systems within 10 days.
Do not irrigate while it is raining or during high winds.
Use a hose nozzle with a shut-off valve when washing your car.

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 10:56 am

EnjoyIt wrote:
Wed Dec 04, 2019 10:45 am
stanford73 wrote:
Wed Dec 04, 2019 10:00 am

Tough sell to DH, who wants to payoff CC debt first.
This is a math problem. Since he has an MBA, then show him the math in a spreadsheet. MBA people love spreadsheets. Just look at the difference between not paying the IRS on time and incurring a penalty plus interest vs paying down the debt. If the penalty is steep enough then you are right. If the penalty is low, then he is correct.

this is from the intuit web site:
"The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%. If you file more than 60 days after the due date, the minimum penalty is $210 or 100% of your unpaid tax, whichever is less.May 24, 2019"
https://www.google.com/url?sa=t&rct=j&q ... ba3YNl0b0T

Seems to me that 25% is higher than your credit card debt so show him that.
This is a great approach, since I do not have the "standing" with DH to convince him that my way--even informed by experts here--is the way to go. Speaking to DH in his language with a spreadsheet is my best bet.

I appreciate this very much--thank you!!

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 11:10 am

JAZZISCOOL wrote:
Wed Dec 04, 2019 10:50 am
goodenyou wrote:
Wed Dec 04, 2019 9:55 am
stanford73 wrote:
Wed Dec 04, 2019 12:31 am
Cubicle wrote:
Fri Nov 29, 2019 11:54 pm
I think OP should not sell their house. Another poster succinctly stated, qualifying for a mortgage, the stress of selling, the stress of buying, the stress of moving... I don't think it would end well.

I do commend OP for making such progress from the original thread to now. And being persistent enough to get her spouse to realize what is happening.

Even though OP said water usage has remained the same... As another poster stated to check the unit pricing, but I'm still suspicious for a leak. Most water meters have a "leak wheel" (or some other name). Tiny wheel/dial that spins even with minimal use, specifically to check for tiny leaks in the system. If OP can see the water meter, assess if there is any water being used when there should not be.

I highly recommend a cheaper mobile phone plan. I am splitting a Tmobile 55+ plan with my mother.

https://www.t-mobile.com/cell-phone-pla ... ount-plans

I see you listed 3 lines. Get the 2 line plan (only one person has to be over the age of 55), & one of your current lines just has to go onto a prepaid $30-40/month plan. Lots to choose from. If there are phones being financed, trade for credit from any of the major manufactures. Obviously dependent on your location & coverage. But there are much cheaper options from all the companies.

Comcast is a soul money drain. Depending on your location, get an internet only plan & drop TV. Get a TV streaming plan, Amazon, Netflix, etc... $247/month... Nothing on TV is worth that. Nothing.

I don't know your location or driving history, but I think your auto insurance could be lower. $1,620 per year for 2 cars. Paid off at that. How recent ago did you comparison quote? 10 minutes from 2 different companies... At least to confirm you're getting decent rates.

Also chiming in that the IRS is nice if you don't add any more delinquencies. 2020 > 2019 > prior year taxes. But make the payments faithfully. I have a close family member who is behind on taxes. Their IRS agent stated the same, don't fall behind on anything new. We will work out a plan for the past. And notify them if you cannot stay current! If you give them a heads up, they are much more flexible.

But based on everything I've read, OP is very capable of pulling through this. The income is there, the spending can be cut. Just combine the 2 & give it time.

My mother was able to get a zero percent for 18 months balance transfer check from one of her credit cards recently. There was a 4% transaction fee. I do not think you should move your credit card balances to any kind of secured loan. But I would explore the possibility of moving your higher interest cards to a lower interest card(s), for simplicity & interest savings (Capital One 24.40% --> US Bank 13% (or zero % if you get a promo deal)). If & only if, the time you anticipate needed to pay off the higher interest cards would be worth a balance transfer fee.
Thanks for all the great advice & encouragement.

I looked into both t-mobile for the phones and cutting the Comcast cord. YouTubeTV is rated highly by PC Magazine & is priced at $50/month. Checking on internet providers to get pricing there. Switching to T-Mobile for the two lines is in process.

DH just switched auto insurance--we'd been paying $1858. But, one car is 19 years old & the other 10 years old. Still seems like a lot of money for insurance, doesn't it? Our driving records are perfect.

DH and I had another budget meeting with much more detail on where we're spending our money. Beyond the high utilities, what jumped out was food and dinners out. Here's the expenses for Jan-Nov 2019:

Auto insurance $1858
Auto gas $676.38
Cable/internet $2390.65
Cell phones $2883
Dental $2133
Dogs-Vet $308.64
-Chewy $543.28
Dinners out $6111.53
Groceries $9086.86
Lawn $680.00
Healthcare $1205.79
CC Interest $2225.02
IRS $39, 340
HOA dues $636.00
Life Ins $4040.19
Housecleaning $2447.00 (now gone)
Mortgage $39,180.42 (3561.00/month)
Netflix $157.90
Home Depot $534.00
Travel $396.83
Electric $2057.41
Water $2790.37
Gas $621.81
_______________________________________
$123, 545


Water Bill Breakdown
Jan 55.22
Feb 55.22
Mar 74.17
Apr 74.17
May 126.98
June 163.48
July 421.65
Aug 658.11
Sept 624.33
Oct 522.99

Nov 88.22
Did you have a leak? I hope you called a plumber.
It seems the high water usage is related to your lawn sprinkler system. That is excessive as others have posted. 1) Many water districts in Colorado recommend ONLY watering 3 days per week because of our water issues as a state and the climate. 2) You need a reliable landscape person to evaluate the sprinkler system in the spring to check for leaks. Especially if you house is older than 10 years old, these are very common. The winter months look more normal (ish). You can set your sprinkler system to follow the guidelines for your water district (e.g. max 3 days/week). Not much you can do about this now if you have blown out your sprinkler system and the ground is frozen.

I know some people love their green lawns but over-watering is bad for the state's water supply and your water bills. :)

Example from Denver Water (which services many suburbs)

Summer watering rules are in effect May 1 to Oct. 1.

Water during cooler times of the day — lawn watering is not allowed between 10 a.m. and 6 p.m.
Water no more than three days per week.
Do not allow water to pool in gutters, streets and alleys.
Do not waste water by letting it spray on concrete and asphalt.
Repair leaking sprinkler systems within 10 days.
Do not irrigate while it is raining or during high winds.
Use a hose nozzle with a shut-off valve when washing your car.
Thanks for the good info--we are on Denver Water. Our HOA is very aggressive in sending out violation letters if the lawn is looking parched in any way, so DH has watered it daily! I see the guidelines are watering for just 3 days a week.

And, I agree, we need a landscape pro to evaluate whether or not there's a leak in the system. DH insists there is none, as he would "see water gathering somewhere" but we'll have to wait until the spring, as the water has been shutoff for the season. This is yet another area I know zilch about, but I very much appreciate your spending time to look up the guidelines & post them. I'm smarter now.

ohai
Posts: 1132
Joined: Wed Dec 27, 2017 2:10 pm

Re: Follow Up: Husband's Surprise Debts

Post by ohai » Wed Dec 04, 2019 11:11 am

I'd also think about cutting the $2400 cable bill. I don't know about what this costs where you live but, my internet is $600 a year, and you don't need to watch Game of Thrones when your budget is 1/3 unpaid taxes.

Perhaps you do not need to pay $4k for life insurance. If one of you passes away, I imagine downsizing would be under consideration and perhaps some other cost savings with that.

I'd also let the lawn die. It is better for the environment anyway. (edit, I guess HOA might not like that).

BarbBrooklyn
Posts: 501
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: Follow Up: Husband's Surprise Debts

Post by BarbBrooklyn » Wed Dec 04, 2019 11:58 am

stanford73 wrote:
Wed Dec 04, 2019 10:00 am
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
So the one expense you've eliminated is the houseckeaner? Who is going to clean the 3000 square foot house? If the answer is you, I dont see how this plan is in any way off to a start that works.
We've eliminated more than housecleaning. We cut the groceries by half ($400/month), totally eliminated the "dinners out" budget, reducing cable/cell bills. We are both cleaning the house every two weeks & with just the 2 of us, it's easy to keep it clean on a daily basis.
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
Agree that IRS payments should be made monthly; they should also be the first thing that gets paid, along with the mortgage.
Tough sell to DH, who wants to payoff CC debt first.
I'm curious what DH's overall take on this situation is, since you only discovered the pile of debt and unpaid taxes by accident.

What was HIS solution to the problem going to be?

Does your accountant know about the unpaid taxes and debt? And is there a possibility of enlisting him/her as an ally in getting DH and you on a single page, financially?

From everything I've read, here and elsewhere, the IRS plays nicely if you keep current. If you fall behind while on a payment plan, aren't they apt to call everything in at once? The IRS is a super-creditor and can garnish even SS payments.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

BarbBrooklyn
Posts: 501
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: Follow Up: Husband's Surprise Debts

Post by BarbBrooklyn » Wed Dec 04, 2019 12:12 pm

I would also start with Denver Water to get advice about how to find and correct a leak.

https://www.denverwater.org/residential ... airs/leaks

I also found this "rule of thumb" of 1 inch of water per 1000 square feet. It might help you estimate how much water you should be using if you are giving your lawn the correct amount of water. (This is from the Lowe's website)

How Much to Water

If nature hasn't supplied water as rain, apply approximately 1 inch of water, (a general rule of thumb). This will give deep penetration of the soil to a depth of 6 to 8 inches. One inch of water or rain is equivalent to 623 gallons per 1,000 square feet. Water should be applied no faster than the soil is able to absorb it. If water begins to run off before 1 inch is applied, stop sprinkling until it's absorbed and then resume.

How long will applying 1 inch of water take? This depends on the size of the hose, pressure and type of sprinkler being used. There are several methods for determining how much you’re applying.

1. Do the Math: Find the gallons per minute (GPM) flow rate of the sprinkler being used from the package of the manufacturer. Multiply the square footage to be watered by .62 gallons or 1 inch of water per square foot. Example: 1,000 square feet x .62 gallons = 620 gallons. This tells you how many gallons of water you need to apply to the lawn. Divide that number by the GPM of your sprinkler, and you can figure how many minutes to water.

2. Collect the Water: Place a cup or glass in the middle of the area covered by your sprinkler, turn water on and watch the time. Measure water in the cup until 1 inch is collected. This is the time you need to sprinkle. The best accuracy is obtained if you use several containers at different places in the sprinkler’s coverage pattern and average the results.

3. Buy a Flow Timer: Often called water timers, these units actually measure water flow. They are calibrated in 100 gallons and can be set from 100 to 1,500 gallons to give you the water necessary for the square footage covered by the sprinkler. Use the formula in Step 1 to calculate the gallons needed.

4. Test the Soil: Test the soil 6 inches or more below the surface to make sure it's dry. Turn on your sprinkler, and periodically test the soil 6 inches down until the water has penetrated to that depth. Keep track of how long it took, and use that as the time you need to water.
Last edited by BarbBrooklyn on Wed Dec 04, 2019 12:41 pm, edited 1 time in total.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

tomd37
Posts: 3091
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: Follow Up: Husband's Surprise Debts

Post by tomd37 » Wed Dec 04, 2019 12:17 pm

OP - I don't know what type of grass you are watering, but all the turf management companies here in middle Tennessee recommend one inch of water per week, regardless of where it comes from; nature or the irrigation system. They also say not to water every day, but rather just once or twice a week and water longer and deeper when you do to get the total of an inch per week when combined with natures rain. That way the water goes deep and the roots go down deeper and the grass stays hydrated better. Frequent top watering brings and keeps the roots near the top instead of going deep. Bear in mind that over watering in the hot and humid summer months also introduces the possibility of fungus diseases such as brown patch and others.

We had 108 days of over 90 degree temperatures this year and my fine fescue seed lawn (a cool season grass) survived quite well with the recommended watering method. August was the hottest and driest month here (only 0.02 inches of rain) for the entire month.
Tom D.

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 12:49 pm

BarbBrooklyn wrote:
Wed Dec 04, 2019 11:58 am
stanford73 wrote:
Wed Dec 04, 2019 10:00 am
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
So the one expense you've eliminated is the houseckeaner? Who is going to clean the 3000 square foot house? If the answer is you, I dont see how this plan is in any way off to a start that works.
We've eliminated more than housecleaning. We cut the groceries by half ($400/month), totally eliminated the "dinners out" budget, reducing cable/cell bills. We are both cleaning the house every two weeks & with just the 2 of us, it's easy to keep it clean on a daily basis.
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
Agree that IRS payments should be made monthly; they should also be the first thing that gets paid, along with the mortgage.
Tough sell to DH, who wants to payoff CC debt first.
I'm curious what DH's overall take on this situation is, since you only discovered the pile of debt and unpaid taxes by accident.

What was HIS solution to the problem going to be?

Does your accountant know about the unpaid taxes and debt? And is there a possibility of enlisting him/her as an ally in getting DH and you on a single page, financially?

From everything I've read, here and elsewhere, the IRS plays nicely if you keep current. If you fall behind while on a payment plan, aren't they apt to call everything in at once? The IRS is a super-creditor and can garnish even SS payments.
To answer your question, I don't think he has a solution in mind other than reducing overhead/debt and increasing income, with an emphasis on increasing MY income. DH doesn't want to dwell on what he did and still believes that hustling at the end of the year to scrap together the $30k is his only option.

I haven't met the accountant. She is someone DH found without any references, even though we had recommendations from two of his tennis buddies, who are both business owners & very successful. Having not met her, I can't fathom a guess about whether or not she could get us on the same page. I assume so? Definitely worth a try.

We are current with the IRS--that payment is automatically deducted every month.

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 12:58 pm

tomd37 wrote:
Wed Dec 04, 2019 12:17 pm
OP - I don't know what type of grass you are watering, but all the turf management companies here in middle Tennessee recommend one inch of water per week, regardless of where it comes from; nature or the irrigation system. They also say not to water every day, but rather just once or twice a week and water longer and deeper when you do to get the total of an inch per week when combined with natures rain. That way the water goes deep and the roots go down deeper and the grass stays hydrated better. Frequent top watering brings and keeps the roots near the top instead of going deep. Bear in mind that over watering in the hot and humid summer months also introduces the possibility of fungus diseases such as brown patch and others.

We had 108 days of over 90 degree temperatures this year and my fine fescue seed lawn (a cool season grass) survived quite well with the recommended watering method. August was the hottest and driest month here (only 0.02 inches of rain) for the entire month.
Thank you! We have a dry climate in Colorado, so that factors into the watering schedule here. Watering daily is not sustainable. Every other day or 3 days a week at night, with spot watering for dry areas, might be a solution. Also, we need to have the system checked for a leak.
Last edited by stanford73 on Wed Dec 04, 2019 1:00 pm, edited 2 times in total.

BarbBrooklyn
Posts: 501
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: Follow Up: Husband's Surprise Debts

Post by BarbBrooklyn » Wed Dec 04, 2019 12:59 pm

stanford73 wrote:
Wed Dec 04, 2019 12:49 pm
BarbBrooklyn wrote:
Wed Dec 04, 2019 11:58 am
stanford73 wrote:
Wed Dec 04, 2019 10:00 am
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am

We've eliminated more than housecleaning. We cut the groceries by half ($400/month), totally eliminated the "dinners out" budget, reducing cable/cell bills. We are both cleaning the house every two weeks & with just the 2 of us, it's easy to keep it clean on a daily basis.
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
Agree that IRS payments should be made monthly; they should also be the first thing that gets paid, along with the mortgage.

I haven't met the accountant. She is someone DH found without any references, even though we had recommendations from two of his tennis buddies, who are both business owners & very successful. Having not met her, I can't fathom a guess about whether or not she could get us on the same page. I assume so? Definitely worth a try.

We are current with the IRS--that payment is automatically deducted every month.
You are current with the back taxes but not with 2018, right?

You've never met your accountant?

I'm trying hard to think of something financially actionable to say. I think you should meet the accountant and maybe the two of you can come up with a plan for getting DH to see this differently. Or maybe you need your own accountant to represent YOUR interests.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

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stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 1:14 pm

BarbBrooklyn wrote:
Wed Dec 04, 2019 12:59 pm

You are current with the back taxes but not with 2018, right?

You've never met your accountant?

I'm trying hard to think of something financially actionable to say. I think you should meet the accountant and maybe the two of you can come up with a plan for getting DH to see this differently. Or maybe you need your own accountant to represent YOUR interests.
Yes, we are current on back taxes on the payment plan and 2018 taxes are paid, except for $8k. I think because we are under the $50k owed, the IRS might allow folding in of the $8k, if we can't pay it with cash.

And, I hear you. I realize I need to protect myself financially. I want to proceed in good faith and give enough time to set things right, meet together with the accountant and get on the same page. If I see we are off course financially, I will need to make other decisions. Getting to know the numbers and understanding how to budget, etc. is helpful regardless. I'm still hopeful.

aristotelian
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Re: Follow Up: Husband's Surprise Debts

Post by aristotelian » Wed Dec 04, 2019 1:34 pm

You are getting great advice on the budget. One other question, what is:

Life Ins $4040.19

Spouse and I pay about $500/year for term life. Whole life is generally discouraged here as it is more of a hybrid of insurance and investment. You may want to cash it out and then re-evaluate your insurance needs.

Topic Author
stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 1:40 pm

aristotelian wrote:
Wed Dec 04, 2019 1:34 pm
You are getting great advice on the budget. One other question, what is:

Life Ins $4040.19

Spouse and I pay about $500/year for term life. Whole life is generally discouraged here as it is more of a hybrid of insurance and investment. You may want to cash it out and then re-evaluate your insurance needs.
We have a $600k term life insurance policy, costing $367/month. For the low amount you pay, I'm guessing you are not in your late 60's? And, because of the debt load we're carrying, the BH recommendation is to keep the insurance, until the debt is paid off.

bayview
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Re: Follow Up: Husband's Surprise Debts

Post by bayview » Wed Dec 04, 2019 1:44 pm

stanford73 wrote:
Wed Dec 04, 2019 9:54 am

2. I agree keeping current on taxes hasn't happened for as long as DH has been a consultant (2011). The pre-tax surplus for Dec & Jan is about $5k; in Feb, $15k; and Mar $25k. DH wants to prioritize CC debt and not taxes. Not sure what to say to convince him otherwise. Although we talk about the debts, he still controls what gets paid.
Why? If you have joint checking, write a (monthly) check to the IRS before your husband pays on the CCs. As long as you leave enough in the account to cover (not necessarily pay down) the CCs, you should be OK. If he overpays on the CC debt and a check bounces, that's on him. It's his fault for not having paid the taxes timely, and also for (apparently) lying to you, indicating that he was current on the recent stuff.

IRS debt should be prioritized. They can put a lien on you. That's way worse for your credit scores than high CC balances.

I'm rooting for you making this work, especially because of your great attitude and willingness to take this mess on. But he is NEVER going to be responsible with your joint finances, and accepting the idea that "he controls what gets paid" is flirting with financial disaster for your future.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

EnjoyIt
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Re: Follow Up: Husband's Surprise Debts

Post by EnjoyIt » Wed Dec 04, 2019 1:46 pm

stanford73 wrote:
Wed Dec 04, 2019 1:40 pm
aristotelian wrote:
Wed Dec 04, 2019 1:34 pm
You are getting great advice on the budget. One other question, what is:

Life Ins $4040.19

Spouse and I pay about $500/year for term life. Whole life is generally discouraged here as it is more of a hybrid of insurance and investment. You may want to cash it out and then re-evaluate your insurance needs.
We have a $600k term life insurance policy, costing $367/month. For the low amount you pay, I'm guessing you are not in your late 60's? And, because of the debt load we're carrying, the BH recommendation is to keep the insurance, until the debt is paid off.
I still don’t see a point in paying $8k over two years for life insurance you will give up in 2 years.

aristotelian
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Re: Follow Up: Husband's Surprise Debts

Post by aristotelian » Wed Dec 04, 2019 1:52 pm

stanford73 wrote:
Wed Dec 04, 2019 1:40 pm
aristotelian wrote:
Wed Dec 04, 2019 1:34 pm
You are getting great advice on the budget. One other question, what is:

Life Ins $4040.19

Spouse and I pay about $500/year for term life. Whole life is generally discouraged here as it is more of a hybrid of insurance and investment. You may want to cash it out and then re-evaluate your insurance needs.
We have a $600k term life insurance policy, costing $367/month. For the low amount you pay, I'm guessing you are not in your late 60's? And, because of the debt load we're carrying, the BH recommendation is to keep the insurance, until the debt is paid off.
Correct, we took out 20 year terms in our 30's. Not sure about what to do in this situation. On the one hand, loss of income would be bad. On the other hand, the insurance is in effect adding to the debt. What is the worst case if one of you dies? There is loss of income and... debt. Right now, that outcome is already a certainty. Kind of like when people ask whether they should go into their emergency fund to pay off credit card debt. I don't know, I would be tempted to prioritize the debt and maybe reduce or eliminate the insurance for now.

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stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 1:56 pm

bayview wrote:
Wed Dec 04, 2019 1:44 pm
stanford73 wrote:
Wed Dec 04, 2019 9:54 am

2. I agree keeping current on taxes hasn't happened for as long as DH has been a consultant (2011). The pre-tax surplus for Dec & Jan is about $5k; in Feb, $15k; and Mar $25k. DH wants to prioritize CC debt and not taxes. Not sure what to say to convince him otherwise. Although we talk about the debts, he still controls what gets paid.
Why? If you have joint checking, write a (monthly) check to the IRS before your husband pays on the CCs. As long as you leave enough in the account to cover (not necessarily pay down) the CCs, you should be OK. If he overpays on the CC debt and a check bounces, that's on him. It's his fault for not having paid the taxes timely, and also for (apparently) lying to you, indicating that he was current on the recent stuff.

IRS debt should be prioritized. They can put a lien on you. That's way worse for your credit scores than high CC balances.

I'm rooting for you making this work, especially because of your great attitude and willingness to take this mess on. But he is NEVER going to be responsible with your joint finances, and accepting the idea that "he controls what gets paid" is flirting with financial disaster for your future.
No joint checking accounts, so that needs to be changed. I think BarbinBrooklyn's suggestion to get the accountant to weigh in on the IRS debt is my best shot at getting DH to recognize the risks.And, I hear you. Thanks.

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stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 1:59 pm

aristotelian wrote:
Wed Dec 04, 2019 1:52 pm
stanford73 wrote:
Wed Dec 04, 2019 1:40 pm
aristotelian wrote:
Wed Dec 04, 2019 1:34 pm
You are getting great advice on the budget. One other question, what is:

Life Ins $4040.19

Spouse and I pay about $500/year for term life. Whole life is generally discouraged here as it is more of a hybrid of insurance and investment. You may want to cash it out and then re-evaluate your insurance needs.
We have a $600k term life insurance policy, costing $367/month. For the low amount you pay, I'm guessing you are not in your late 60's? And, because of the debt load we're carrying, the BH recommendation is to keep the insurance, until the debt is paid off.
Correct, we took out 20 year terms in our 30's. Not sure about what to do in this situation. On the one hand, loss of income would be bad. On the other hand, the insurance is in effect adding to the debt. What is the worst case if one of you dies? There is loss of income and... debt. Right now, that outcome is already a certainty. Kind of like when people ask whether they should go into their emergency fund to pay off credit card debt. I don't know, I would be tempted to prioritize the debt and maybe reduce or eliminate the insurance for now.
Bottom line...I'd be in a world of hurt if something happened to DH right now. Having the protection of that insurance policy is necessary.

clip651
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Re: Follow Up: Husband's Surprise Debts

Post by clip651 » Wed Dec 04, 2019 2:04 pm

stanford73 wrote:
Wed Dec 04, 2019 12:49 pm
BarbBrooklyn wrote:
Wed Dec 04, 2019 11:58 am
stanford73 wrote:
Wed Dec 04, 2019 10:00 am
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
So the one expense you've eliminated is the houseckeaner? Who is going to clean the 3000 square foot house? If the answer is you, I dont see how this plan is in any way off to a start that works.
We've eliminated more than housecleaning. We cut the groceries by half ($400/month), totally eliminated the "dinners out" budget, reducing cable/cell bills. We are both cleaning the house every two weeks & with just the 2 of us, it's easy to keep it clean on a daily basis.
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
Agree that IRS payments should be made monthly; they should also be the first thing that gets paid, along with the mortgage.
Tough sell to DH, who wants to payoff CC debt first.
I'm curious what DH's overall take on this situation is, since you only discovered the pile of debt and unpaid taxes by accident.

What was HIS solution to the problem going to be?

Does your accountant know about the unpaid taxes and debt? And is there a possibility of enlisting him/her as an ally in getting DH and you on a single page, financially?

From everything I've read, here and elsewhere, the IRS plays nicely if you keep current. If you fall behind while on a payment plan, aren't they apt to call everything in at once? The IRS is a super-creditor and can garnish even SS payments.
To answer your question, I don't think he has a solution in mind other than reducing overhead/debt and increasing income, with an emphasis on increasing MY income. DH doesn't want to dwell on what he did and still believes that hustling at the end of the year to scrap together the $30k is his only option.

I haven't met the accountant. She is someone DH found without any references, even though we had recommendations from two of his tennis buddies, who are both business owners & very successful. Having not met her, I can't fathom a guess about whether or not she could get us on the same page. I assume so? Definitely worth a try.

We are current with the IRS--that payment is automatically deducted every month.
You need to meet the accountant. She needs to share ALL the information with you, both current and past. And your DH needs to agree to this. It isn't his money, you two are married, it is your (both of your) money. He can come along, or not. But you need to meet this accountant, find out what she's been doing, find out her perspective on the big picture. And eventually, you need to decide whether you need a different accountant or can work with this one. But you need to be in the loop on EVERYTHING. Full transparency. Fully informed and involved in all aspects.

You two need to have a working division of labor on the finances:
You DH needs to focus on bringing in income (him bringing in income, ASAP and on a continuing basis for coming years). If you can also focus on bringing in additional income, that will help as well, but him focusing on your bringing in more income is not helpful - he needs to focus on what he can do. He has been doing a poor job of paying the bills. He has been doing a poor job of keeping you informed on the bills. So he needs to focus on bringing in the money to pay the bills. Meanwhile, he needs to let you take over paying all the bills and running all the accounts (full transparency is fine, but he needs to let you actually start driving this, and he needs to facilitate this by being transparent and arranging for you to have proper access to all accounts). It does neither of you any good for him to carry on with his old ways of making messes while you two chat about it.

If he is not willing to go along with this ... we are back in the realm of relationship advice which I will stay away from to keep the thread open and helpful for you. But he (and you) may be looking at losing the house you love eventually if you can't get on top of this. My advice is about dividing the financial work (earning, bill paying, budgeting, planning, tracking, etc) so that it works. Not relationship advice, but nuts and bolts about how to get the needed financial work done.

Thank you for continuing to update us OP, I hope you continue to do that. You have made so much progress in understanding your situation. More work to do, but you are on the path. You just need to get your DH on the path with you, full force.

And, no, you (you = you and your DH) aren't current on taxes. You are current on a payment plan for old taxes, which were previously delinquent, or you wouldn't have a payment plan. You still owe some on 2018 taxes. You still haven't paid estimated taxes for 2019 (as far as your last update that I recall) and we are in December 2019. Unclear if there is a workable plan for paying 2019 taxes on time. You have no plan yet for paying 2020 taxes in a timely manner. Your DH has been saying and/or thinking that you two are "current" on a lot of things because he has been keeping up bare minimum payments while adding to debt (IRS payment plans, HELOC, additional mortgages over the years, etc). Keeping up with minimum payments that keep you out of bankruptcy or worse, and being "current" are by no means the same thing. (And, as I've said before - I am by no means trying to be harsh on you, OP. I am trying to help you see the situation you two are in. Your DH has kept it from you, and has been perhaps fooling himself along the way as well.)

best wishes, and keep at it! You can do this!
cj

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Re: Follow Up: Husband's Surprise Debts

Post by RickBoglehead » Wed Dec 04, 2019 2:09 pm

Your water usage should be way down the priority list, since it's not bigger until summer. Today, turn off everything. Find water meter and see if the tiny white gear (or similar) is turning. If it is, there's a leak somewhere. If it's not, you're good. Then, you have until it's watering time to find out if the sprinkler system is leaking. Assuming you pay a company to blow out the sprinklers, have them come in the spring and do the math that tells them how many GPM (gallons per minute) each head in each zone is using. They can do that in maybe 30 minutes. Then, you can do the math - if zone 1 has 3 heads that put out 3 gpm, and they run for 15 minutes, then it's 3 x 3 x 15 = 135 gallons. Once this is done, it's a simple matter of reading the meter before and after and seeing if the usage matches up.

Some water companies have a website where you can see this, down to the hourly usage. I have a relative in Florida that wastes water tremendously. On watering days, usage surpasses 2,500 gallons that day. In heavy watering months, the bill is obscene, usage hit 50,000 gallons in some months.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

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FlyAF
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Re: Follow Up: Husband's Surprise Debts

Post by FlyAF » Wed Dec 04, 2019 2:36 pm

stanford73 wrote:
Wed Dec 04, 2019 1:14 pm
BarbBrooklyn wrote:
Wed Dec 04, 2019 12:59 pm

You are current with the back taxes but not with 2018, right?

You've never met your accountant?

I'm trying hard to think of something financially actionable to say. I think you should meet the accountant and maybe the two of you can come up with a plan for getting DH to see this differently. Or maybe you need your own accountant to represent YOUR interests.
Yes, we are current on back taxes on the payment plan and 2018 taxes are paid, except for $8k. I think because we are under the $50k owed, the IRS might allow folding in of the $8k, if we can't pay it with cash.

And, I hear you. I realize I need to protect myself financially. I want to proceed in good faith and give enough time to set things right, meet together with the accountant and get on the same page. If I see we are off course financially, I will need to make other decisions. Getting to know the numbers and understanding how to budget, etc. is helpful regardless. I'm still hopeful.
You cannot be current on your 2018 taxes and yet still owe $8k of 2018 taxes. In fact, it's actually worse because right after saying that you're current, you mention possibly being able to roll over that debt into a previous pile of unpaid tax debt. This is the exact line of thinking that your husband has had for decades and has put you in the position that you're in.

I admire you for attempting to right the ship, but the way you guys think about money has got to change. It's like a drug addict needing an intervention. The more I read, the more I see that this is not all just on 1 party.

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Re: Follow Up: Husband's Surprise Debts

Post by Meg77 » Wed Dec 04, 2019 3:32 pm

stanford73 wrote:
Wed Dec 04, 2019 10:48 am
Meg77 wrote:
Wed Dec 04, 2019 10:36 am
stanford73 wrote:
Sun Nov 24, 2019 4:42 pm
[In order to best assist the member, replies which bring up non-financial issues will be removed. --admin LadyGeek]

I have a question on the HELOC. Although my signature is on the initial paperwork, why is it that US Bank would allow my husband only to withdraw money? Shouldn't they require approvals from both signers on the HELOC?
I'm a banker and just want to answer this question. When we close a HELOC to joint borrowers, there is a document you both sign per regulations (I want to say they are federal regs, but I am in TX for the record so it's possible it's a TX reg) that says you agree to allow EITHER party to withdraw or that you require BOTH parties to withdraw and manage the line.

The vast majority of people opt for either/or, just like a joint checking account works. It's simply a hassle to contact both parties to approve every check or transaction. However you can set it up that way and may be able to change how it's set up now. In our case I had a client recently ask to remove his spouse from the approval process since it had become cumbersome for both of them to have to call or email to approve every draw request. We had them sign an updated form saying they wanted to change that, and similarly we could modify the procedure to require both parties to sign or verbally approve if someone asked. Not every bank may be so willing to do that of course, but you can certainly ask.
Thanks--that's very helpful. The HELOC is maxed out--$80k all withdrawn without my knowledge or approval. And, yet, I'm responsible for half that debt now. Since my name is on the HELOC, one would think a co-signer at the very least would be notified of any withdrawals, but I understand the law/rules don't automatically allow for that. Then again, I never expected DH to access that equity line without my approval.

I'll check with US Bank to see if the paperwork can be changed. Thanks, again.
That really stinks. To be fair, you are legally responsible as a spouse for any debt your husband incurs regardless of whether your name is on the loan. (Similarly, you each are entitled to assets accumulated in one another's names.) Not that this is likely to make you feel any better of course! I'm sorry you're going through this. I would personally prefer my husband to cheat on me than damage our joint finances substantially.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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Re: Follow Up: Husband's Surprise Debts

Post by BarbBrooklyn » Wed Dec 04, 2019 3:41 pm

Is it true that the OP is responsible for ALL of the debt?

Certainly she is on the hook for the HELOC and for the IRS, but if the credit cards are in his name only, that's his debt alone, isn't it?

My best to you; you've made a good start. Stay the course!
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

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Re: Follow Up: Husband's Surprise Debts

Post by Shackleton » Wed Dec 04, 2019 3:51 pm

Meg77 wrote:
Wed Dec 04, 2019 3:32 pm
I would personally prefer my husband to cheat on me than damage our joint finances substantially.
Ha! Spoken like a banker! I used to tell my husband (tongue in cheek), "sure, you can have a girlfriend as long as you don't spend any of MY money on her!" (We only have joint accounts, and used to joke that all of my money was my money and all of his money was my money.)
“Superhuman effort isn't worth a damn unless it achieves results.” ~Ernest Shackleton

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Re: Follow Up: Husband's Surprise Debts

Post by sfmurph » Wed Dec 04, 2019 3:54 pm

clip651 wrote:
Wed Dec 04, 2019 2:04 pm
stanford73 wrote:
Wed Dec 04, 2019 12:49 pm
...
We are current with the IRS--that payment is automatically deducted every month.
...
And, no, you (you = you and your DH) aren't current on taxes. You are current on a payment plan for old taxes, which were previously delinquent, or you wouldn't have a payment plan. You still owe some on 2018 taxes. You still haven't paid estimated taxes for 2019 (as far as your last update that I recall) and we are in December 2019. Unclear if there is a workable plan for paying 2019 taxes on time. You have no plan yet for paying 2020 taxes in a timely manner. ...
This is key. You aren't current on your taxes, and haven't been since before the HELOC was opened. (I would guess that is *why* the HELOC was opened.) To avoid any penalties on the 2019 taxes, 90+% need to be paid by January 15th. Including the $8000 owed for 2018, you're looking at writing a $50,000 check in the next 6 weeks. I can see the attraction of that HELOC checkbook.

As for credit cards vs IRS, your husband has it totally backwards. I can kind of understand it, because the credit cards send a bill each month and have a high interest rate. Getting a new credit card that charges 0% for balance rollovers might give some breathing space to set the focus where it needs to be — paying your taxes.

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Re: Follow Up: Husband's Surprise Debts

Post by Katietsu » Wed Dec 04, 2019 3:56 pm

I am amazed at how much you have done in so short of a time. I know it must make it harder on you that husband does not seem as stressed as you.

It does look like your ability to bring in additional income into next year really could have a significant impact on your likelihood of success. As difficult as it is, try not to completely forget the income part as you are overwhelmed by the expense and personal side of the story.

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Re: Follow Up: Husband's Surprise Debts

Post by delamer » Wed Dec 04, 2019 4:08 pm

Meg77 wrote:
Wed Dec 04, 2019 3:32 pm
stanford73 wrote:
Wed Dec 04, 2019 10:48 am
Meg77 wrote:
Wed Dec 04, 2019 10:36 am
stanford73 wrote:
Sun Nov 24, 2019 4:42 pm
[In order to best assist the member, replies which bring up non-financial issues will be removed. --admin LadyGeek]

I have a question on the HELOC. Although my signature is on the initial paperwork, why is it that US Bank would allow my husband only to withdraw money? Shouldn't they require approvals from both signers on the HELOC?
I'm a banker and just want to answer this question. When we close a HELOC to joint borrowers, there is a document you both sign per regulations (I want to say they are federal regs, but I am in TX for the record so it's possible it's a TX reg) that says you agree to allow EITHER party to withdraw or that you require BOTH parties to withdraw and manage the line.

The vast majority of people opt for either/or, just like a joint checking account works. It's simply a hassle to contact both parties to approve every check or transaction. However you can set it up that way and may be able to change how it's set up now. In our case I had a client recently ask to remove his spouse from the approval process since it had become cumbersome for both of them to have to call or email to approve every draw request. We had them sign an updated form saying they wanted to change that, and similarly we could modify the procedure to require both parties to sign or verbally approve if someone asked. Not every bank may be so willing to do that of course, but you can certainly ask.
Thanks--that's very helpful. The HELOC is maxed out--$80k all withdrawn without my knowledge or approval. And, yet, I'm responsible for half that debt now. Since my name is on the HELOC, one would think a co-signer at the very least would be notified of any withdrawals, but I understand the law/rules don't automatically allow for that. Then again, I never expected DH to access that equity line without my approval.

I'll check with US Bank to see if the paperwork can be changed. Thanks, again.
That really stinks. To be fair, you are legally responsible as a spouse for any debt your husband incurs regardless of whether your name is on the loan. (Similarly, you each are entitled to assets accumulated in one another's names.) Not that this is likely to make you feel any better of course! I'm sorry you're going through this. I would personally prefer my husband to cheat on me than damage our joint finances substantially.
I don’t believe that’s true regarding debt taken on in the husband’s name only. If the credit cards are in his name, then she isn’t legally responsible for them.

That said, I assume that any creditor of his could go after money in their joint accounts to satisfy the debt.

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stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 6:12 pm

clip651 wrote:
Wed Dec 04, 2019 2:04 pm
stanford73 wrote:
Wed Dec 04, 2019 12:49 pm
BarbBrooklyn wrote:
Wed Dec 04, 2019 11:58 am
stanford73 wrote:
Wed Dec 04, 2019 10:00 am
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
So the one expense you've eliminated is the houseckeaner? Who is going to clean the 3000 square foot house? If the answer is you, I dont see how this plan is in any way off to a start that works.
We've eliminated more than housecleaning. We cut the groceries by half ($400/month), totally eliminated the "dinners out" budget, reducing cable/cell bills. We are both cleaning the house every two weeks & with just the 2 of us, it's easy to keep it clean on a daily basis.
BarbBrooklyn wrote:
Wed Dec 04, 2019 5:21 am
Agree that IRS payments should be made monthly; they should also be the first thing that gets paid, along with the mortgage.
Tough sell to DH, who wants to payoff CC debt first.
I'm curious what DH's overall take on this situation is, since you only discovered the pile of debt and unpaid taxes by accident.

What was HIS solution to the problem going to be?

Does your accountant know about the unpaid taxes and debt? And is there a possibility of enlisting him/her as an ally in getting DH and you on a single page, financially?

From everything I've read, here and elsewhere, the IRS plays nicely if you keep current. If you fall behind while on a payment plan, aren't they apt to call everything in at once? The IRS is a super-creditor and can garnish even SS payments.
To answer your question, I don't think he has a solution in mind other than reducing overhead/debt and increasing income, with an emphasis on increasing MY income. DH doesn't want to dwell on what he did and still believes that hustling at the end of the year to scrap together the $30k is his only option.

I haven't met the accountant. She is someone DH found without any references, even though we had recommendations from two of his tennis buddies, who are both business owners & very successful. Having not met her, I can't fathom a guess about whether or not she could get us on the same page. I assume so? Definitely worth a try.

We are current with the IRS--that payment is automatically deducted every month.
You need to meet the accountant. She needs to share ALL the information with you, both current and past. And your DH needs to agree to this. It isn't his money, you two are married, it is your (both of your) money. He can come along, or not. But you need to meet this accountant, find out what she's been doing, find out her perspective on the big picture. And eventually, you need to decide whether you need a different accountant or can work with this one. But you need to be in the loop on EVERYTHING. Full transparency. Fully informed and involved in all aspects.

You two need to have a working division of labor on the finances:
You DH needs to focus on bringing in income (him bringing in income, ASAP and on a continuing basis for coming years). If you can also focus on bringing in additional income, that will help as well, but him focusing on your bringing in more income is not helpful - he needs to focus on what he can do. He has been doing a poor job of paying the bills. He has been doing a poor job of keeping you informed on the bills. So he needs to focus on bringing in the money to pay the bills. Meanwhile, he needs to let you take over paying all the bills and running all the accounts (full transparency is fine, but he needs to let you actually start driving this, and he needs to facilitate this by being transparent and arranging for you to have proper access to all accounts). It does neither of you any good for him to carry on with his old ways of making messes while you two chat about it.

If he is not willing to go along with this ... we are back in the realm of relationship advice which I will stay away from to keep the thread open and helpful for you. But he (and you) may be looking at losing the house you love eventually if you can't get on top of this. My advice is about dividing the financial work (earning, bill paying, budgeting, planning, tracking, etc) so that it works. Not relationship advice, but nuts and bolts about how to get the needed financial work done.

Thank you for continuing to update us OP, I hope you continue to do that. You have made so much progress in understanding your situation. More work to do, but you are on the path. You just need to get your DH on the path with you, full force.

And, no, you (you = you and your DH) aren't current on taxes. You are current on a payment plan for old taxes, which were previously delinquent, or you wouldn't have a payment plan. You still owe some on 2018 taxes. You still haven't paid estimated taxes for 2019 (as far as your last update that I recall) and we are in December 2019. Unclear if there is a workable plan for paying 2019 taxes on time. You have no plan yet for paying 2020 taxes in a timely manner. Your DH has been saying and/or thinking that you two are "current" on a lot of things because he has been keeping up bare minimum payments while adding to debt (IRS payment plans, HELOC, additional mortgages over the years, etc). Keeping up with minimum payments that keep you out of bankruptcy or worse, and being "current" are by no means the same thing. (And, as I've said before - I am by no means trying to be harsh on you, OP. I am trying to help you see the situation you two are in. Your DH has kept it from you, and has been perhaps fooling himself along the way as well.)

best wishes, and keep at it! You can do this!
cj
Thanks, cj. I appreciate all your straightforward, actionable advice & reminders, as it's exactly what I need to hear. I have taken notes of your comments, as well as others, and have my updated to-do list. I agree--meeting the accountant is crucial. I'm hoping she can convince DH that the taxes are the priority & deliver a financial reality check. I clearly do not have the financial/MBA "creds" with DH to convince him this is the way to go, so maybe a third-party can get it done.

I will continue to update our progress and hope I don't wear out my welcome here. You have all been a lifeline for me. Thanks, again.

Topic Author
stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 6:23 pm

Katietsu wrote:
Wed Dec 04, 2019 3:56 pm
I am amazed at how much you have done in so short of a time. I know it must make it harder on you that husband does not seem as stressed as you.

It does look like your ability to bring in additional income into next year really could have a significant impact on your likelihood of success. As difficult as it is, try not to completely forget the income part as you are overwhelmed by the expense and personal side of the story.
Thank you very much. I feel overwhelmed at times, so your kind words and support mean a lot. And, I will keep in mind that the focus needs to be on both debt reduction and increasing income. DH is making some headway--he closed another big deal yesterday--and I will be prospecting for new clients after the holidays. It's easy to get mired in the anxiety & frustration of the debt load, but staying positive and focused on making more money will solve a lot of these problems. Slowly, but surely, we can dig out of it.

Katietsu
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Re: Follow Up: Husband's Surprise Debts

Post by Katietsu » Wed Dec 04, 2019 7:19 pm

You have received a lot of information. So I just wanted to repeat the advice earlier that was given by one of the professionals on BH. 2020 taxes are first priority then 2019 taxes before paying anymore than required on the installment agreement. Hopefully, your accountant agrees.

Herekittykitty
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Re: Follow Up: Husband's Surprise Debts

Post by Herekittykitty » Wed Dec 04, 2019 7:28 pm

stanford73 wrote:
Wed Dec 04, 2019 1:59 pm

......Bottom line...I'd be in a world of hurt if something happened to DH right now. Having the protection of that insurance policy is necessary.
Stick to your guns on this. You are absolutely right. You need the protection of that insurance policy.

And I wouldn't let it go once the debt is paid off or debt paid off plus nice emergency and hills and valleys fund in place. Nope - not me. Bottom line here for me is that as you say, you absolutely would be in a world of hurt if something happened to your husband right now.

Plus - no matter what happens now or in the future - you will never be able to be certain you aren't in debt again and just not know it.
I don't know anything.

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stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 7:47 pm

Katietsu wrote:
Wed Dec 04, 2019 7:19 pm
You have received a lot of information. So I just wanted to repeat the advice earlier that was given by one of the professionals on BH. 2020 taxes are first priority then 2019 taxes before paying anymore than required on the installment agreement. Hopefully, your accountant agrees.
Totally agree & understand. Thanks for the reminder. I will queue this up for the accountant & hopefully she agrees & convinces DH to follow through.

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stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 7:49 pm

Herekittykitty wrote:
Wed Dec 04, 2019 7:28 pm
stanford73 wrote:
Wed Dec 04, 2019 1:59 pm

......Bottom line...I'd be in a world of hurt if something happened to DH right now. Having the protection of that insurance policy is necessary.
Stick to your guns on this. You are absolutely right. You need the protection of that insurance policy.

And I wouldn't let it go once the debt is paid off or debt paid off plus nice emergency and hills and valleys fund in place. Nope - not me. Bottom line here for me is that as you say, you absolutely would be in a world of hurt if something happened to your husband right now.

Plus - no matter what happens now or in the future - you will never be able to be certain you aren't in debt again and just not know it.
Yeah, no way will the policy be cancelled and DH agrees. Policy is up in 7 years and then the renewal is cost-prohibitive. It's also on auto=pay, along with the mortgage and IRS. Appreciate the support.

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JAZZISCOOL
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Re: Follow Up: Husband's Surprise Debts

Post by JAZZISCOOL » Wed Dec 04, 2019 7:52 pm

RickBoglehead wrote:
Wed Dec 04, 2019 2:09 pm
Your water usage should be way down the priority list, since it's not bigger until summer. Today, turn off everything. Find water meter and see if the tiny white gear (or similar) is turning. If it is, there's a leak somewhere. If it's not, you're good. Then, you have until it's watering time to find out if the sprinkler system is leaking. Assuming you pay a company to blow out the sprinklers, have them come in the spring and do the math that tells them how many GPM (gallons per minute) each head in each zone is using. They can do that in maybe 30 minutes. Then, you can do the math - if zone 1 has 3 heads that put out 3 gpm, and they run for 15 minutes, then it's 3 x 3 x 15 = 135 gallons. Once this is done, it's a simple matter of reading the meter before and after and seeing if the usage matches up.

Some water companies have a website where you can see this, down to the hourly usage. I have a relative in Florida that wastes water tremendously. On watering days, usage surpasses 2,500 gallons that day. In heavy watering months, the bill is obscene, usage hit 50,000 gallons in some months.
In addition to the max 3 days/week allowed by Denver water, they also recommend a maximum amount of ZONE depending on the TYPE of sprinkler heads your system has:

Look for the link that shows "lawn watering times" for the chart (chart would not paste in):

https://www.denverwater.org/residential ... ring-rules

Types: Fixed spray head, Rotor head and Rotary/high-efficiency nozzle

June and July have the highest water allocations. Denver Water also uses a 3 tier pricing system so the high usage rates really add up in the summer. We Coloradans live in a HIGH DESERT so water management is really important for many reasons.

In the spring, your landscaper-sprinkler professional will be able to tell you what kind of sprinkler heads you have if you don't know. :happy

gr7070
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Re: Follow Up: Husband's Surprise Debts

Post by gr7070 » Wed Dec 04, 2019 8:17 pm

Herekittykitty wrote:
Wed Dec 04, 2019 7:28 pm
stanford73 wrote:
Wed Dec 04, 2019 1:59 pm

......Bottom line...I'd be in a world of hurt if something happened to DH right now. Having the protection of that insurance policy is necessary.
Stick to your guns on this. You are absolutely right. You need the protection of that insurance policy.

Bottom line here for me is that as you say, you absolutely would be in a world of hurt if something happened to your husband right now.
If one is dependent upon their spouse for income they need term life insurance. It's that simple.

Freetime76
Posts: 107
Joined: Wed Jun 26, 2019 8:26 pm

Re: Follow Up: Husband's Surprise Debts

Post by Freetime76 » Wed Dec 04, 2019 9:47 pm

stanford73 wrote:
Wed Dec 04, 2019 6:23 pm
Katietsu wrote:
Wed Dec 04, 2019 3:56 pm
I am amazed at how much you have done in so short of a time. I know it must make it harder on you that husband does not seem as stressed as you.

It does look like your ability to bring in additional income into next year really could have a significant impact on your likelihood of success. As difficult as it is, try not to completely forget the income part as you are overwhelmed by the expense and personal side of the story.
Thank you very much. I feel overwhelmed at times, so your kind words and support mean a lot. And, I will keep in mind that the focus needs to be on both debt reduction and increasing income. DH is making some headway--he closed another big deal yesterday--and I will be prospecting for new clients after the holidays. It's easy to get mired in the anxiety & frustration of the debt load, but staying positive and focused on making more money will solve a lot of these problems. Slowly, but surely, we can dig out of it.
Hi OP: You’re doing better than I would be. Talk about going from “0 to 60” fast... :wink: Finances always are tied with a whole host of other questions and decisions - how do we want to live? what do we do when we have extra funds? how do we handle a shortfall? and not always an easy answer.

Two more thoughts:
- If you’re talking #s with your DH and the CPA, I wonder if it might help to couch it in terms of future-planning also? You have term life for a reason, same goes for knowing what’s-what and how to handle the finances. Regardless, my DH and I have had theses types of conversations, and for sure big topics like this do take time to marinate. We usually take steps to stop the bleeding, so to speak, and then hash through the rest more slowly.

- Another vote for IRS as #1 priority. The IRS collection procedures are merciless and very powerful if payments are missed. It’s easy to keep thinking, “oh, we’ll just need to earn more” (especially for high earners), but that becomes a Sisyphean task.

ETA: I am glad to not have a water bill. Ouch!

Topic Author
stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 9:49 pm

For estimated taxes, does anyone know if the IRS has a grace period before charging penalties/interest?

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 9:59 pm

Freetime76 wrote:
Wed Dec 04, 2019 9:47 pm
stanford73 wrote:
Wed Dec 04, 2019 6:23 pm
Katietsu wrote:
Wed Dec 04, 2019 3:56 pm
I am amazed at how much you have done in so short of a time. I know it must make it harder on you that husband does not seem as stressed as you.

It does look like your ability to bring in additional income into next year really could have a significant impact on your likelihood of success. As difficult as it is, try not to completely forget the income part as you are overwhelmed by the expense and personal side of the story.
Thank you very much. I feel overwhelmed at times, so your kind words and support mean a lot. And, I will keep in mind that the focus needs to be on both debt reduction and increasing income. DH is making some headway--he closed another big deal yesterday--and I will be prospecting for new clients after the holidays. It's easy to get mired in the anxiety & frustration of the debt load, but staying positive and focused on making more money will solve a lot of these problems. Slowly, but surely, we can dig out of it.
Hi OP: You’re doing better than I would be. Talk about going from “0 to 60” fast... :wink: Finances always are tied with a whole host of other questions and decisions - how do we want to live? what do we do when we have extra funds? how do we handle a shortfall? and not always an easy answer.

Two more thoughts:
- If you’re talking #s with your DH and the CPA, I wonder if it might help to couch it in terms of future-planning also? You have term life for a reason, same goes for knowing what’s-what and how to handle the finances. Regardless, my DH and I have had theses types of conversations, and for sure big topics like this do take time to marinate. We usually take steps to stop the bleeding, so to speak, and then hash through the rest more slowly.

- Another vote for IRS as #1 priority. The IRS collection procedures are merciless and very powerful if payments are missed. It’s easy to keep thinking, “oh, we’ll just need to earn more” (especially for high earners), but that becomes a Sisyphean task.

ETA: I am glad to not have a water bill. Ouch!
Thanks--that's a good point. You'd think by now we would've talked/decided about the "future" and how we want to spend our time & money. I know what I want to do, but that's on hold for two years, while we stop the bleeding. DH just likes working, he says. I'm very well aware of how precious and short life can be at this age/stage of life. So, it really is a shame that we find ourselves in this mess at this age. I try not to dwell on it.

DH is resistant to setting aside 2020 taxes until he has 2019 accounted for (hopefully by March) and he is quite stubborn. We've been under the IRS cloud since 2011, so it's become "normalized" and that's a dangerous thing IMO. And, you're so right--it's easy to think, we'll just earn more! But, as we know, there's an expiration date on that ability. I'm just hoping we can keep the income coming in for at least two more years.

And, good for you not having a water bill! That day is coming for us, too ;)

random_walker_77
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Re: Follow Up: Husband's Surprise Debts

Post by random_walker_77 » Wed Dec 04, 2019 10:17 pm

There's no grace period. Taxes are owed as income is earned, but their penalties are basically interest at ~6%/yr (0.5% /month). The safe harbors can help you avoid even that, but that's something to learn more about for next time. The sooner you pay, the sooner the interest stops accruing, but 6% is pretty reasonable. What makes the IRS worth paying off is that you can't get away from them...

Topic Author
stanford73
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Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 10:27 pm

random_walker_77 wrote:
Wed Dec 04, 2019 10:17 pm
There's no grace period. Taxes are owed as income is earned, but their penalties are basically interest at ~6%/yr (0.5% /month). The safe harbors can help you avoid even that, but that's something to learn more about for next time. The sooner you pay, the sooner the interest stops accruing, but 6% is pretty reasonable. What makes the IRS worth paying off is that you can't get away from them...
Thank you!

Katietsu
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Re: Follow Up: Husband's Surprise Debts

Post by Katietsu » Wed Dec 04, 2019 10:30 pm

There is no grace period to avoid the penalty charge on the estimated taxes. But the closer to the due date the payment is made, the lower the penalty will be.

Husband wants to pay off 2019 by the April 15 due date and then catch up with 2020 in the summer? That would be a reasonable plan in your circumstances.

dweo
Posts: 1
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Re: Follow Up: Husband's Surprise Debts

Post by dweo » Wed Dec 04, 2019 10:37 pm

stanford73 wrote:
Wed Dec 04, 2019 6:12 pm
Thanks, cj. I appreciate all your straightforward, actionable advice & reminders, as it's exactly what I need to hear. I have taken notes of your comments, as well as others, and have my updated to-do list. I agree--meeting the accountant is crucial. I'm hoping she can convince DH that the taxes are the priority & deliver a financial reality check. I clearly do not have the financial/MBA "creds" with DH to convince him this is the way to go, so maybe a third-party can get it done.
Perhaps time to stop letting the lack of "creds" hold you back, or perhaps time for the DH to stop using this argument against making necessary changes. After all, creds didn't help to avoid this situation.

Topic Author
stanford73
Posts: 110
Joined: Tue Sep 11, 2018 1:05 am

Re: Follow Up: Husband's Surprise Debts

Post by stanford73 » Wed Dec 04, 2019 10:55 pm

Katietsu wrote:
Wed Dec 04, 2019 10:30 pm
There is no grace period to avoid the penalty charge on the estimated taxes. But the closer to the due date the payment is made, the lower the penalty will be.

Husband wants to pay off 2019 by the April 15 due date and then catch up with 2020 in the summer? That would be a reasonable plan in your circumstances.
Yes, we talked about it tonight. That's what he'd like to do and it's good to hear support for that plan. For 2018, DH made payments throughout the year and when he filed for an extension, he wrote a check for $23k, which he thought was the full balance. But, once the accountant reviewed the taxes, she made a few modifications, which resulted in an add'l $7500 owed. He filed the taxes without attaching payment, so he's waiting for the IRS to confirm the amount owed?? We don't know when they'll expect payment, but with no cash flow to cover that amount until Feb, DH is suggesting he either take it out of the 401k :( or roll it into the current IRS payment plan. UGH. But, there's no other option really? Any ideas?

random_walker_77
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Re: Follow Up: Husband's Surprise Debts

Post by random_walker_77 » Wed Dec 04, 2019 11:07 pm

The IRS expects payment to come with the return (or earlier, as noted, w/ estimated taxes). If you pay later, they're going to expect interest. Start the discussion now, and work out a payment plan. Right now, it seems that the IRS is getting paid last, and for most people, the IRS gets paid first via payroll deductions. Y'all need to start figuring the budget w/ the IRS coming first. Based on past history, you can figure that the IRS gets an average <23%?> of new income, and that should be set aside and go into the quarterly tax payments. With what's left over after that, you pay the mortgage, and the other bills including the IRS payment plan for previous years.

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