Posted: 12/2/2010 3:33:43 PM EDT
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I have a couple of different issues going on, with a little overlapping with each other.
First, long story short (divorce and getting screwed on joint taxes) I owe the IRS $5K. So, for fiscal year 2010 I need to sink some money into an IRA. I’ve read thru the different types and forgetting the details, I need the types where, I think, pre-taxed money goes in. If so, how much can I put in to an account like this? What are other tax shelters? I’m looking into buying a house for this purpose but it’s too late into the year for that. And I plan on investing into a TSP account. Second, I figure that I’m in the hole for around $20-22K (credit card, various bills, plus IRS thing). Is it advisable to get a personal/signature loan to cover all these? I had thought of tossing it all onto my credit card then shoot for a lower rate. In any event I plan on making some drastic budget cuts and dump my retirement pay (500 bucks per month) and then some salary into this effort. I generally live below my means, have a very good credit rating, support a kid going to college (and he works too). My car (Cherokee) is paid off but recently had to splurge and buy the kid another vehicle because he totaled his Jeep in a no-fault accident. But, paying a couple of cell phone bills today that totaled over $800 really set me on edge (recent carrier change and some confusion: old plan kept running concurrent with new plan). So, I’m looking for the best idea of cleaning-up some old debt, and staying off the IRS radar. Thoughts and suggestions? |
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I have a couple of different issues going on, with a little overlapping with each other. First, long story short (divorce and getting screwed on joint taxes) I owe the IRS $5K. So, for fiscal year 2010 I need to sink some money into an IRA. I’ve read thru the different types and forgetting the details, I need the types where, I think, pre-taxed money goes in. If so, how much can I put in to an account like this? What are other tax shelters? I’m looking into buying a house for this purpose but it’s too late into the year for that. And I plan on investing into a TSP account. Second, I figure that I’m in the hole for around $20-22K (credit card, various bills, plus IRS thing). Is it advisable to get a personal/signature loan to cover all these? I had thought of tossing it all onto my credit card then shoot for a lower rate. In any event I plan on making some drastic budget cuts and dump my retirement pay (500 bucks per month) and then some salary into this effort. I generally live below my means, have a very good credit rating, support a kid going to college (and he works too). My car (Cherokee) is paid off but recently had to splurge and buy the kid another vehicle because he totaled his Jeep in a no-fault accident. But, paying a couple of cell phone bills today that totaled over $800 really set me on edge (recent carrier change and some confusion: old plan kept running concurrent with new plan). So, I’m looking for the best idea of cleaning-up some old debt, and staying off the IRS radar. Thoughts and suggestions? You don't want the ROTH, roth is post tax and your money grows tax free. The other option is a traditional IRA and last time I checked its right around 5k tax free. I'd tell your kid that lifes tough you are first priority. They out handing out student loans and grants like candy, which since you are in the hole increases the amount they get. I guarantee they will bust ass harder if they are paying for it. Do not use a credit card try to get a low fixed rate loan. I personally wouldn't have bought my kid a car more like matched what he could pay. |
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You don't want the ROTH, roth is post tax and your money grows tax free. The other option is a traditional IRA and last time I checked its right around 5k tax free. I'd tell your kid that lifes tough you are first priority. They out handing out student loans and grants like candy, which since you are in the hole increases the amount they get. I guarantee they will bust ass harder if they are paying for it. Do not use a credit card try to get a low fixed rate loan. I personally wouldn't have bought my kid a car more like matched what he could pay. Yeah, the car thing. Trust me, had I found a good CHEAP vehicle he would be driving that. Trouble is, nowadays it is impossible to find a clean cheap car like the kind you could find by the hundreds a long time ago. I put eight grand into a used 4WD Ranger w/under 100K on the clock because it'd be cheaper in the long run, and if he heads to the military post-school he gets the payments. The other factor is that he lives in OK and I'm in FL and bought the truck the day I left, so I didn't have any time to really look. As for me I need to thin the herd some too. I have a Jeep Cherokee in pretty good shape, but went crazy and bought a M1009 Blazer and a M1028 Shelter Carrier so these can be expected to show-up on the EE sometime soon. Other things are getting rid of storage costs, revamping my insurance needs, canx one life insuance policy to find simple term one and so on. |
| That is what I would suggest. Cut every bill possible, throw money in the IRA. Quit paying for school, and this Jan have him apply for new grants with your new financial data. Which will mean he gets more money. Look into the florida or young florida scholarship program. It was really good IIRC. Something along those lines is the name not to hard to find IDT. |
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That is what I would suggest. Cut every bill possible, throw money in the IRA. Quit paying for school, and this Jan have him apply for new grants with your new financial data. Which will mean he gets more money. Look into the florida or young florida scholarship program. It was really good IIRC. Something along those lines is the name not to hard to find IDT. Yep, I had thought of grants and the like, but form from what I had gathered (probably erroneously) that my income level was too much. Is that possible? |
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I'm personally looking for a sub-$1500 truck, so I have no sympathy for you on the vehicle. Pumping cash into an IRA to reduce your IRS liability is great, but you're not going to reduce it by much so you need to run some numbers on that scenario. A personal loan at 10% (or so) to cover all of your CC/IRS debt is better than paying twice that on the CC + interest & penalties to the IRS. If you decide to go that way, you can always work to pay it off early. Be careful not to build more CC debt while you're paying off the old CC debt. |
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why the hell did you pay the cell phone bill?
if you have duplicate phone plans, that were not used, you should have told them you will only pay what the old payments were. i had a $935 cell phone bill when i was in college. they tried to charge me for roaming when i had a nation wide plan. i told them where they could stick it, and said i would pay the standard $36.00 a month that i signed up for with the contract as i had not gone over my minutes. the monkey on the other then of the phone argued, and i said if they were not happy i would be sending no payments and returning my cell phone and canceling the plan. i ended up paying $36 and not a penny more, bill paid in full. |
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why the hell did you pay the cell phone bill? if you have duplicate phone plans, that were not used, you should have told them you will only pay what the old payments were. i had a $935 cell phone bill when i was in college. they tried to charge me for roaming when i had a nation wide plan. i told them where they could stick it, and said i would pay the standard $36.00 a month that i signed up for with the contract as i had not gone over my minutes. the monkey on the other then of the phone argued, and i said if they were not happy i would be sending no payments and returning my cell phone and canceling the plan. i ended up paying $36 and not a penny more, bill paid in full. Cell phone was a switch from US Celluar to Verizon and had a bill to both. They had no service here in this part of the country and wanted to go with a more 'progressive' service. I plan on disputing when I have some facts. |
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why the hell did you pay the cell phone bill? if you have duplicate phone plans, that were not used, you should have told them you will only pay what the old payments were. i had a $935 cell phone bill when i was in college. they tried to charge me for roaming when i had a nation wide plan. i told them where they could stick it, and said i would pay the standard $36.00 a month that i signed up for with the contract as i had not gone over my minutes. the monkey on the other then of the phone argued, and i said if they were not happy i would be sending no payments and returning my cell phone and canceling the plan. i ended up paying $36 and not a penny more, bill paid in full. Cell phone was a switch from US Celluar to Verizon and had a bill to both. They had no service here in this part of the country and wanted to go with a more 'progressive' service. I plan on disputing when I have some facts. aaah, ok that makes more sense. |
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That is what I would suggest. Cut every bill possible, throw money in the IRA. Quit paying for school, and this Jan have him apply for new grants with your new financial data. Which will mean he gets more money. Look into the florida or young florida scholarship program. It was really good IIRC. Something along those lines is the name not to hard to find IDT. Yep, I had thought of grants and the like, but form from what I had gathered (probably erroneously) that my income level was too much. Is that possible? Yep biggest misnomer out there about Financial Aid. Its called the "Florida Bright Futures Program". Seems like a great deal for FL residents. |
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That is what I would suggest. Cut every bill possible, throw money in the IRA. Quit paying for school, and this Jan have him apply for new grants with your new financial data. Which will mean he gets more money. Look into the florida or young florida scholarship program. It was really good IIRC. Something along those lines is the name not to hard to find IDT. Yep, I had thought of grants and the like, but form from what I had gathered (probably erroneously) that my income level was too much. Is that possible? Yep biggest misnomer out there about Financial Aid. Its called the "Florida Bright Futures Program". Seems like a great deal for FL residents. But he is in school in OK, but its worth looking into. Which I will. |