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We will not see another person like this
My W2 is 800k, mostly from stock appreciation. When I do everything myself on TurboTax, total tax I have to pay this year is 110k (ouch). I look at the form view and it was mainly because of alternative minimum tax (AMT). I don’t have 110k in cash, so I hired a certified tax accountant (good reviews on yelp) hoping she could make it lower. She did my taxes and told me o have to pay 60k. This is because she says I don’t have to do AMT because I made less than 1M. 2 questions. 1. Is turbo tax wrong? Or is my tax accountant wrong? Obviously I want to go with my tax accountant and pay less but do I have to be worried if they are wrong? 2. I didn’t save any money and I don’t have 60k. Any recommendations on how to go about taking out a loan to pay this? Do I walk into a bank and say, “hi I want a loan?”, or use lending club or something? Thank you everyone in advance for your advice! Update: already sold most of stocks. The ones I didn’t sell, I can’t sell now because they are in blackout period Filing married jointly. Yea my wife’s really unhappy with this situation. I regret not saving any money. “Also very worrying that when you hire a pro you get such a highly doubtful outcome while you’re hiring for a peace of mind” - yes how I feel. Final update: got another tax accountant. Filed and paid only paid 20k. Turns out I don’t need to do AMT. TurboTax didn’t import cost basis correctly (after comparing TurboTax forms with the forms accountant prepared).
Sell the stock to pay taxes?
You work on installment plan with federal government. Search for installment plan for tax payment
What was the total tax you paid during the year? Not asking the tax you owe
I think… 200-300k? Just the standard.
You should sell some of your stock.
Blackout period
Are you married filing jointly?
did you sell any thing that would warrant capital gains? do your payment options, i’d focus on three things: 1. payment plan with IRS 2. taking out a margin loan on existing equities 3. just sell 60k of stock — you are being taxed on it as income, sell enough to cover the tax most people choose 3
Blackout period, can’t sell
Get a second opinion. Income under $1M does not exempt you from AMT.
AMT limit for single is 523k?
Agree with this. It’s possible that an accountant could do better than TurboTax but any obvious “magic trick” like this one needs to be strongly backed/verified by yourself. Presumably Turbo has most of them in the system. Also very worrying that when you hire a pro you get such a highly doubtful outcome while you’re paying for peace of mind
Anyone who exceeds a certain level of income has to pay AMT, and the threshold is far less than 1M. Go with a better tax pro that provides “guarantee” to cover for miscalculated tax, else penalty can be much higher. I presume you still own the stocks that appreciated, can’t use them to pay IRS? You may also go with payment plan option with IRS. FWIW, the tax (110k) looks correct by comparison with similar W2s I have seen in the past
I still own some stocks yes, but there’s blackout period also. Thank you for suggesting payment plan option, I didn’t know about it I will look into it
Please be kind enough to tell us how one can make 800k and not have 60k .. even after the drop you should still have enough stock to cover it ..
Helping out family and friends. Separated parents, giving each parent 2k/ month and paying for random stuff like cars, their house payments, etc. paying for in-law expenses, etc etc. Also keep in mind that out of the 800k, like half of it is already taxed so I took home around 400k to spend.
I understand helping family out but this seems like you are being taken advantage of. Have you considered how you will pay for your current lifestyle once you are retired?
What did you blow it on?
This is the real question
The tax consultant