<p>I am absolutely in shock. My accountant just told us we owe $9100.00 on our taxes. </p>
<p>We do not have the money, as we took huge losses last year in pay and had to move across the country for my husbands new job. </p>
<p>We actually made about $30,000 less than we did the previous year, but still ended up owing. Our standard deduction was higher than all of our deductions combined, so we can’t use any of them.</p>
<p>My question is this- what does the IRS do in these situations? Do they actually let you go on a payment plan if you owe this much? </p>
<p>Thanks in advance for any help. I feel sick.</p>
<p>I am not a tax expert. But… this happened to us in the 91 recession. We filed, we paid as much as we could until it was paid off. The payment plan was three years. However, my first reaction is: get a second opinion, not just about the legalities of the situation, but on your entire tax situation.</p>
<p>I usually do tax planning before the end of the year to get an idea as to what our liability will be so that I can make an estimated payment on January 15 if need be. There were a lot of new credits and deductions this year so it’s surprising that your liability is higher than it was compared to 2008. The thing to do is to go over your returns for 2008 and 2009 to see where the changes were to understand your higher tax bill for 2009 compared to 2008.</p>
<p>stark is asking some of the right questions but it could be anything. Seems very surprising you owe money on less income with the credits available this year. AMT shouldn’t be the problem if you are using the standard deduction. You can deduct your moving expenses too.</p>
<p>tell him/her to send you a prelim copy and compare it (line by line) to your taxes last year. And also ask for a brief explanation as to why it is more. Did you use this accountant last year?? </p>
<p>Perhaps you withheld less because money was tight? </p>
<p>We used an accountant for the last two years (after doing taxes myself for years). I went back to doing it myself this year after finding pretty big errors in his work two years in a row. I was one of those pain-in-the-butt clients who did "shadow’ TurboTax even when I farmed it out. Just goes to show that even the experts can be rushed and make mistakes!</p>
<p>Thanks guys! I figured out the problem, because I have been “shadowing” on Turbo Tax as well.</p>
<p>We started renting our primary home in November of last year. I was claiming the mortgage interest and property taxes as an itemized deduction, but she says she was not. </p>
<p>I don’t know the legalities of how to claim the mortgage interest and taxes, so I am scouring the internet right now.</p>
<p>If I could claim those as itemized deductions, I would only owe about $5800.</p>
<p>Thanks for all the help! I’m starting to breath again.</p>
<p>The mortgage interest and property taxes for Nov. and Dec. would be deductible against the rental income.</p>
<p>If the standard deduction is more than itemized deductions (including interest and property taxes), then the standard deduction is used, and in effect they aren’t “used”.</p>
<p>How are you using them, (post #7), when you stated at at the bg. of the thread that you were using the standard deduction?</p>
<p>Make sure you timely file the return whether or not you pay the remainder due. They will bill you! At that point, you may wish to sign an installment payment agreement. There is a nominal cost-~$60. IRS is very agreeable to them.</p>
<p>$9100 appears to be a high amount to owe based on $30000 less income, but very difficult to state based on we don’t know AGI, withholdings, or any other factors. Many taxpayers are owing more (or smaller refunds) because Obama changed the withholding tables last spring and the Making Work Pay credit isn’t completely offsetting that reduced withholding.</p>
<p>The accountant should be able to quickly review the 2009 and 2008 returns and tell you what changed and how this happened.</p>
<p>Your rental income and expenses are figured on Schedule E. Use the step-by-step interview process in TurboTax and answer yes to the section on rental properties. It should walk you through.</p>
<p>I’m not a tax expert, but mortgage interest and property taxes should always be deductible in one way or another. If you are a homeowner, you will have to see if your interest and other itemized deductions total more than the standard deduction. If you are renting your home, interest and taxes, plus other expenses of renting the home will be deductions against the rental income. If, however, your total expenses from renting the home exceed the income, giving you a net loss on the rental, you may not be able to deduct your losses against your ordinary income, depending on a whole bunch of factors. If you are not able to deduct your losses, you can carry them forward into future tax years to offset future “passive” income.</p>
<p>You can claim the interest and taxes on the home for 10 months on schedule A, and the other two months on schedule E. But you said that your itemized deductions don’t exceed the standard deduction. Did you claim two months of depreciation on schedule E also?</p>
<p>I am so glad I posted this. You all are giving me some excellent ideas. </p>
<p>I don’t know if she claimed the 2 months depreciation, so I need to check that. </p>
<p>My itemized deductions did not exceed the standard deduction unless we claimed the mortgage interest and property taxes as intemized deductions. If I can claim them, or a good amount of them, we will beat the "standard " deduction and also be able to claim other itemized expenses.</p>
<p>We did have less withheld this year, but not knowingly. I guess Mr. Obama didn’t end up really helping us. :-)</p>
<p>Vderon…good luck. I agree with the poster who said that you should be able to deduct your interest and taxes for 10 months…and the portion related to the rental income for the two months. I would think your acct would know that. Yes, you should do the 2 mth depreciation too. And any other expenses for those two months (for example, utilities if you pay for them).
Has she done your state taxes yet? May be complicated given your move across the country. We were hit with a bill this year because, in our state, certain expenses CANNOT be deducted against rental income (as they are on the federal return). We’re not pleased…</p>
<p>So are you saying that she didn’t use any of the interest and taxes on the home? Or did she put them all on schedule E? The correct way is two months on E and the rest on A. Also on E should go two months of insurance, association fees, and any other expenses associated with renting the property. If your preparer didn’t use any of the interest or taxes, maybe you should get a new preparer.</p>
<p>She initially put them all on E. When I questioned her about it, she put 10 months on A, instantly saving me about 4k. She said our combined income was too high to claim any of the lossses on renting the property, which after looking around on the Internet I believe is correct.</p>
<p>I do feel a bit uneasy. I will be going through the return line by line when I get it back.</p>
<p>OK…I really don’t want to hijack this thread but I have a tax question too and it’s related to rental income. We’re in PA, and I did my taxes with Turbo Tax this year. We have depreciation expenses (from when we bought our property back in 2007) - yet they are not flowing through on the PA state return. Is this just a software problem? Or are there some weird rules in PA that disallow depreciation expenses? I checked our taxes last year (prepared by an acct) and same thing…nothing on the PA depreciation line! So we have ZERO income for federal pruposes but a significant income for state. Doesn’t make sense to me. Can someone help?</p>