Posted on 04/22/2018 12:37:24 PM PDT by lee martell
Remember that song by Tom Jones; "I who have nothing!". That pretty much describes me. I'm near 62 y/o, working part time. I hope to keep working at least for the next eight to ten years, then start taking my Social Security.
I have no savings to speak of. I will always owe the IRS something from unpaid student loans or wrongly filed tax statements. Most times I don't receive any return at all, it's simply 'absorbed' and paid out to the Govt. The one bright spot is that due to a sibling's death last year, I have received about $20.000 from her estate. More should be coming later this year.
My question is, is there anyway to protect that inherited sum of money, to safeguard it, in case the govt. gets tired of waiting for the scheduled payout. I know from experience that the IRS has the ability to go to my bank at any time, and scoop out all that it contains, if they choose to do so. It has happened before, and I've never forgotten the shock.
Some online searches to that question advise setting up a retirement plan. I currently don't have one. Are there short term retirement plans that would allow me excess to my principal without incurring an Early Withdrawal 'punishment' fee? Could I renew such a plan after a few years have passed?
If it matters, I'm a Navy veteran. My next stop would be to ask someone at the Navy hospital to refer me to an advisor. Most people think they know, but have limited knowledge. I want to do things above board, no tricks. But I don't like the notion of being fully vulnerable to the mercies of the tax collection system.
Bumping because I’d like to see the responses too.
You ask a question that could be answered different based on specific facts about your liabilities, assets and other beneficiary of estate.
Have you contacted an enrolled agent? That should be your first step.
you owe Nothing, the exemption is in the Milliions
“Are there short term retirement plans that would allow me excess to my principal without incurring an Early Withdrawal ‘punishment’ fee?”
No punishment for early withdrawal after 59 1/2.
Go talk to someone at the Navy Credit Union
Problem for you is you owe money net to the govt. they always get theirs
Don’t remember the exact number but inheritance under around 5 million is not subject to federal inheritance tax. Not sure about states.
Blind Trust.
Anything else is ownership and subject to taxation and confiscation.
“you owe Nothing, the exemption is in the Milliions”
He has other liabilities he want to shelter from.
An enrolled IRS Agent?
Wouldn’t that be like inviting the hungry fox into the hen house for a cup of tea?
Maybe you mean something else.
Unless the estate is worth more than $10 million, you owe nothing.
Consult a CPA. Some are free, others for a nominal charge.
LM doesn’t want the IRS taking the inheritance to pay off his existing tax bills.
An enrolled IRS agent is aprivate individual who has the necessary training to act as an IRS agent without worrying for the IRS. Think financial planner.
You have to start taking the Social Security payment at 70.5 years. Don’t go past that. Start taking it. Your 20,000 inheritance should have no tax liability. Please see an accountant.
“Unless the estate is worth more than $10 million, you owe nothing.”
He already owes the government. He want to prevent them from raiding these funds for the money he owes.
I’ll ask about that Navy Credit Union sometime this week.
This is probably a very common situation.
“Your 20,000 inheritance should have no tax liability. “
Reread his post.
Just read this a bit more closely - take it out in cash asap after receiving it. But if you really owe the US govt that much money, you may want to face facts. They will withhold SS payments among other things if you don’t stay on schedule/pay up.
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