In September, 2023 my Mother who lives in assisted living had to transition to Medicaid. While she still receives a small pension and SS, all but $40 goes to the home and rest is covered by Medicaid. Prior to transition to Medicaid, we had exhausted remaining IRA to cover current expenses, unfortunately, we did not withhold enough taxes from IRA to cover full 2023 taxes due, which took a bump due to the added income. So she owes $$ on both federal and state taxes, but with no funds to pay, how do we resolve? In hindsight, I would have allocated more to taxes with final payout, which would have sped up the timing of her going on Medicaid. How do we resolve? Who do we call to resolve?
There are several options when you have a tax bill that you don't have the money to pay. Refer to the following articles: How to Pay Taxes: 10 Ways to Pay Your Tax Bill, Unable to Pay Your Tax Bill? Here’s What To Do, and the IRS article What if I can’t pay my taxes?
For taxpayers who are unable to pay their taxes because of a permanent situation, they can apply for an Offer in Compromise from the IRS. An Offer in Compromise can let the taxpayer settle their tax bill for less than the amount due. Review the information for an Offer in Compromise.
You didn't indicate what state you live in, but your state may have a similar program. You can visit your state’s Department of Revenue for more information. Review the TurboTax article How do I contact my state's Department of Revenue? to find your state.
Hello Sharon
First off, thank you for your response and adding multiple links. The state is WI and your link and intel looks like it'll be beneficial to generate conversation. For federal, I've started reviewing links you sent, but I need to do more work. At the end of the day Mom has ZERO in budget to pay any balance, so I need to focus on topics related to that. I hope your links get me to that point, but I just need more time to dive into the matter. Again, I TOTALLY appreciate the initial direction. Sincerely, Tim