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Updated over 1 year ago on . Most recent reply

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Ben Cochran
  • Fort Collins, CO
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Help! I just got blown away by my tax bill

Ben Cochran
  • Fort Collins, CO
Posted

Last year I had to sell half of a duplex. I met with my CPA, discussed the details and they estimated the taxes owed would be in the neighborhood of $10k. I just got my returns back and I ended up owning over $30k. My CPA of course now doesn’t remember his estimate of $10k. Other than setting up a payment plan with the IRS, is there anything else I can do to possibly reduce my $30k tax burden? 

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Michael Plaks
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#1 Tax, SDIRAs & Cost Segregation Contributor
  • Tax Accountant / Enrolled Agent
  • Houston, TX
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Michael Plaks
Pro Member
#1 Tax, SDIRAs & Cost Segregation Contributor
  • Tax Accountant / Enrolled Agent
  • Houston, TX
Replied
Quote from @Ben Cochran:

Last year I had to sell half of a duplex. I met with my CPA, discussed the details and they estimated the taxes owed would be in the neighborhood of $10k. I just got my returns back and I ended up owning over $30k. My CPA of course now doesn’t remember his estimate of $10k. Other than setting up a payment plan with the IRS, is there anything else I can do to possibly reduce my $30k tax burden? 

The two numbers - $10k and $30k - may not be contradictory. You may be talking about two different things,

Your CPA may have estimated that selling your property generated $10k of additional tax liability, on top of your other taxes. If you owed $20k from your other income, such as being a realtor or a wholesaler for example, then the total changes to $30k. Of if you under-withheld $20k from your W2 job. 

Nobody can answer "what can be done" without a review of your actual tax return. Many tax accountants will do it for you if you reach out.
  • Michael Plaks
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