Tax time is almost upon us. Some of you will be getting refunds, others will be hit with a tax bill that will be hard to pay. What advice do you have for the member that fall into the second category? How can they come up with the cash to pay Uncle Sam?

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Learn from others mistakes. 2005 was our bad tax year. We made just enough to put us into the 25% tax bracket. Our mistake $2000 on a CC and it still isn't paid. I now do more estimating of taxes so we won't be surprised again

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Kimberly Proud Mommy to Bethany Rose April 2006

2005 was our bad tax year too! We made just enough to bump us into the 25% bracket. Well, our solution was to have ds and now I stay home and back down we went.
We had to put our taxes on a payment plan. Not so bad, we're just about done paying it off and our taxes are more manageable now.
Also, we may not make a lot, but we have a good accountant (not a H&R block guy, an independent CPA). He finds every deductible he can and truly looks out for our best interest. He does our business taxes too and saves us a lot. He's worth the cost (and he always cuts us a deal, after all he knows exactly how much money we don't have )

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Doing my best to raise a GEEK- Genuine Enthusiastic Empowered Kid!

I agree that planning is very important. I'm a CPA and nothing is worse during tax season than telling someone they owe tax they weren't expecting or can't afford.

Typically, this happens when someone is self-employed. For example, someone may get paid $1,000 in June. That money is spent right away. In January, they receive a 1099 for something called "non-employee compensation". That is an IRS term for "you are responsible for all of the taxes". If you are in the 15% tax bracket, you would owe $150 of federal tax, maybe $50 of state tax and about $150 of self-employment tax. Self-employment tax is for social security and medicare - if you are an employee, half of that tax is deducted from your paycheck and half is paid by your employer. If you are self-employed, you owe it all. That comes to $350 of tax you would need to pay in April for money you earned way back in June. What I typically tell clients is to save about 30% of whatever they make being self-employed for taxes.

If you find yourself owing money you don't have, the first thing you need to do is to file your tax return on time even if you can't pay. This will avoid late-filing penalties. Then, you can work with the IRS to setup a payment plan. This is typically a better option than taking a loan from a bank or using a credit card.

we've never actually owed taxes to the IRS, but we did get a bigger refund than we were supposed to last year, and had to pay that back. but they were very nice about it. the only advice i have is to not be scared of the IRS (unless you haven't filed taxes in years). everyone i talked to was really nice and helpful, and they are always willing to assist you. it's blah, but they will help you work it out.