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Paying the Giant Tax Bill

February 22nd, 2017 at 11:53 pm

First, the reason for the giant tax bill:
Despite the fact that I paid extra each month for FWH and we paid estimated taxes, we ended up owing money. The wild card every year is how much profit my business makes. Because my business is an S-corp, we pay the tax on the profit as part of our personal taxes, even if I keep the profit in the business.

I did our taxes with and without the business profit, and with the profit, we end up paying just about the amount of the additional tax we owe.

So my plan is to take a distribution from my business (from the profit I guess) to pay the tax bill.

Now I have to think about 2017 estimated taxes and how to pay those. I think a combination of withdrawing money from our Irish account (since that accounts for some of the tax not covered by FWH) and a couple of small distributions from my business. The rest is from the money that D sets aside in an account for his income from side businesses (he's a children's photographer on the side).

3 Responses to “Paying the Giant Tax Bill”

  1. scottish girl Says:

    What's FWH?

  2. Buendia Says:

    Federal withholding - what the government takes out of the paycheck for federal taxes...

  3. rob62521 Says:

    Sounds like you have a plan anyway. Sorry the tax bill is so large.

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