We owe for both federal and state. We don't have enough money to pay both in full right now. Is it best to pay some to both or pay one in full?

[AnthonyC · Accepted solution]

It's really a personal decision.  You might want to look at the interest rates you will be charged on the balance from both the IRS and whatever state you are located in.  Also, assuming that you are going to set up a payment plan, they usually charge fees to set up those plans, so only having one payment plan may lessen your overall fees.  And, it would likely be easier on you to only manage one payment plan, rather than two.

Also, from a tax perspective, you could at least secure yourself a potential federal deduction next year by paying your state income tax bill this year (state taxes paid in 2019 will be a possible Sch A deduction if you itemize).