college student owes IRS and credit card.
Date: Tue, 03/03/2009 - 11:23
I am 24 and in my third year at college. My basic problem is that when I was 21 I got a contracting job doing internet marketing and never put money aside for taxes. I'm about 10k in debt with the IRS now and owe my credit card around 3k.
With my current situation I have about $400 a month I can use to pay the IRS. I have not submitted a payment plan with them yet because
1. I recently had x-rays done on my teeth and that will cost me thousands and I don't know how to organize payments for medical, credit, IRS and living expenses all at once quite yet... I am applying for some medical grants from a fund at my university which will help immensely but I don't know if I'll get the grants yet.
2. I've been told that I can "negotiate" with the IRS and so I may not want to send them payments until this negotiation can be established, however if I file for an offer to compromise I still have to pay 20% of my total ($2000 that I don't have unless I use it from credit), and in general I think that these negotiations (if there's anything other than the offer I speak of) are probably pretty damn unsuccessful... it's the IRS for crying out loud.
3. I'm going to college on all grants, which makes me very lucky. I have not taken out any loans. I have been told that borrowing student loans to pay off other debts is sometimes a good idea because the interest rates are lower and you don't have to start paying 'til you graduate. However I graduate in a year so there's that to consider as well.
4. I have about 4.5k available to spend on my credit card still and I've been considering throwing all of that at my IRS debt. What do you think about this? I have been told that paying off IRS over credit card is more important because the IRS is essentially a mafia entity and can straight up run in and take things from you, and of course put you in jail, whereas banks are less powerful (arguably).
I realize that my debt situation is not nearly as serious as some of the stories I've read about on this forum, however if I don't start acting now I will be in serious trouble pretty soon. Any advice is welcome!
-Max
With my current situation I have about $400 a month I can use to pay the IRS. I have not submitted a payment plan with them yet because
1. I recently had x-rays done on my teeth and that will cost me thousands and I don't know how to organize payments for medical, credit, IRS and living expenses all at once quite yet... I am applying for some medical grants from a fund at my university which will help immensely but I don't know if I'll get the grants yet.
2. I've been told that I can "negotiate" with the IRS and so I may not want to send them payments until this negotiation can be established, however if I file for an offer to compromise I still have to pay 20% of my total ($2000 that I don't have unless I use it from credit), and in general I think that these negotiations (if there's anything other than the offer I speak of) are probably pretty damn unsuccessful... it's the IRS for crying out loud.
3. I'm going to college on all grants, which makes me very lucky. I have not taken out any loans. I have been told that borrowing student loans to pay off other debts is sometimes a good idea because the interest rates are lower and you don't have to start paying 'til you graduate. However I graduate in a year so there's that to consider as well.
4. I have about 4.5k available to spend on my credit card still and I've been considering throwing all of that at my IRS debt. What do you think about this? I have been told that paying off IRS over credit card is more important because the IRS is essentially a mafia entity and can straight up run in and take things from you, and of course put you in jail, whereas banks are less powerful (arguably).
I realize that my debt situation is not nearly as serious as some of the stories I've read about on this forum, however if I don't start acting now I will be in serious trouble pretty soon. Any advice is welcome!
-Max
