Just when I thought I was a pimp with my taxes, I go and do something stupid like *not* paying them. I’m such a dummy!!
I was literally sitting on my couch on the 15th watching the horribleness unfold with Boston, when a friend of mine tells me it’s just a sad day overall. And indeed it was. First one of our cousins passes away in the morning after a strong fight with cancer :(, and then later the marathon tragedy strikes and halts the country. Unbelievable. Then to top it all off – as my friend quickly chimes in with an attempt to lighten the mood – “it’s also Tax Day.”
It felt good to relieve the tension for a hot second and put a smile on my face, until I realized I didn’t recall ever sending mine in?? I had sent my 2012 tax stuff earlier last month, but never for the 1st quarter numbers of 2013 like an idiot! ‘Cuz they were so close in timing!
So for the first time in my adult life, I actually missed the tax cut off date. Wow. How’s that for being a personal finance blogger? :)
Now obviously this is incredibly minute compared to the *real* tragedies unfolding all around that day, but nonetheless it was a problem to put out however small. So I picked up the phone and called my accountant ASAP to ask her what the best way was to fix all this. Which she basically advised to just mail it all out as soon as I can, and then I may or may not get a nice letter from the IRS saying I owe them a few bucks – but that should be the extent of it. Especially since it was my first time. She also said we might be able to get out of it too if we write a good letter back explaining the mix up (ie. me paying my 2012 taxes just a month earlier and it causing confusion with me), but who knows…
So I may or may not have to pay a hundred or two for my absent-mindedness. I can live with that. Lesson learned, and now I can say I’m no longer a perfect tax payer virgin ;) I also went right away to add in the future quarterly payment dates on my calendar!! That’s really the main reason I missed it anyways – I didn’t get my email alerts I’m used to seeing! Every year I add them all up once I get my taxes filed, but I guess I was just too giddy this time around what, with all my savings I was gonna get, that it just totally escaped me. Oh well.
For those who are interested, here are the amounts I now pay, compared to those I used to. All of which get sent in quarterly as I’m self-employed:
- 2013: $8,600/quarter
- 2012: $8,000/quarter
- 2011: $5,575/quarter
You can see the trend ;) Although as many of you will probably point out, it’s a good problem too have. The more you make = the more you have to pay in taxes overall! So I can’t complain too much. All a part of the game, right?
Anywho – that was my blunder for the week. How did your guys’ tax stuff pan out this year? All nice and settled now? Or still scrambling to get them finished up with your extension you (hopefully) got? Either way, it’s a nice feeling once it’s all done and closed out. I’ll let you know if we end up having to pay any penalties from all this, but you can bet your ass it won’t be happening again!
Photo by andrewmalone, Words by J$
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We are DINKS here in WI, we take the standard deductions. I love my CPA! My husband could do our taxes, but I like to touch base with the man every year. Silly, but when he tells us we are doing alright, the positive strokes he gives us, somehow keeps me sane until the next year’s visit.
Not silly at all – totally get that!
I actually schedule my estimated taxes due using https://www.eftps.gov/eftps/, almost 1 year in advance. That way I cannot “forget” about it.
Of course, if your income trajectory is up, it is okay if you pay the same amount as your tax should have been for the prior year. However next April 15 you would have to pay the difference, especially if you made a lot more. But you won’t owe any penalties
Glad you caught that right away! Salary matters of course, but it seems you’re much better at deferring your taxes. I paid about $25,000. I am including everything my employer deducts: federal, state and local taxes, social security, medicaid, etc. Are you including all that?
I include everything my accountant tells me to include :) It’s weird being your own employer sometimes with all the rules and what not, so I don’t even dare do it on my own.
I have two reminders on my outlook calendar for estimated taxes due date. One a couple weeks in advance and one the day before they’re due. I’m paying in more taxes than ever (a good thing) but after calculating how much we’ll actually owe, rather than just sending in a set percent of my side business income, I think I may be able to cut back on my tax payments!
YAY! (and boo in a small sense).
That’s a good point actually. I do a % every year so naturally the numbers will always be off (but not too much where I get penalized!). Then if something major happens for the better or for the worse, I’ll talk it over w/ my CPA and we adjust from there… Well, at least in theory. Haven’t had to do that yet which I think is a good thing?
Oh no! That sucks man. Unfortunately, I still have my taxes payroll deducted…which means I’m still at a job:)
haha… indeed it does! but lots of pros working at a “real” job too :)
Endend up with a surprisingly larger refund (first time claiming the baby). I should probably change my withholdings, but it looks like I am going to have an increase in my dividend income this year, so I will probably just stay the course. I know people say I shouldn’t give an interest free loan to the government, but if I put that money in the bank I am pretty much giving an interest free loan to the bank, so it is basically a wash. I would rather get this as a lump sump and then invest it than trying to remember to transfer a small amount each pay check.
J$ – Biggie said it best… Mo’ Money Mo’ (tax) Problems…
Yessir! And I *totally* agree with “giving the gov’t a loan” too. If that’s what makes you most comfortable and you enjoy getting the lump at the end (which I used to enjoy too!) then by all means keep doing your thang, brotha. No shame in sticking to what works.
At least you remembered it when you did! I’m sure they’ll give you a pass this time around. Our taxes went fine this year. We only have to submit yearly one (still work for someone else) and we got that done in early March. We already received our small refund and it has been put towards debt! Sucks to have it gone already, but it got us closer to our goals for the year.
Debt is a perfect place for it though, you’ll be out of it in no time if you keep doing that!
At least you remembered that you forgot right away. ;) We have two separate reminders so we do not forget to send our quarterly payments off and we nearly missed it this time and mailed them out on the 13th. It is nice to see that progression, isn’t it…until you have to write that sucker out. ;)
You know what… I should just change my calendar items to be YEARLY instead of 1-time notifications! D’uhh…. the dates never change!
Ouch! I hope you don’t have to pay that much of a penalty. This is why I always try to get my taxes done as soon as possible – because I know that I’m likely to flake out and miss the deadline.
Me too! When it’s on the calendar at least! Haha…
My wife has her own business. We actually don’t pay quarterly taxes for her. Our accountant said it was fine to shoot the IRS a check in December so we’ve done it that way the last few years. Never had a problem. Perhaps it’s because her business brings in so much less than my paychecks so we’re still giving the gub’ment plenty o cash each quarter.
I find that interesting since technically our tax system is set up as “pay as you go.” I guess as long as the IRS seems to be ok with it then I wouldn’t change. I might do a CYA move and get your accountant to write it down that he says it is ok, that way if the IRS does go after you for some reason you at least have someone to pass the buck to and his errors and omissions insurance should be able to cover the claim.
That’s a good idea. Unfortunately paying for the accountant was a one-time deal. We took the advice and paid him, but the result of his review overall was that we were covering everything in TurboTax quite well. So I manage my blog, my wife’s business, a startup and my regular 9-5 all through that. It’s manageable….most of the time.
Yeah, that would scare me too much, haha… I know you are okay up to a certain amount of money, but then after that they want their cut or they start tacking on penalties. But maybe y’all are below that number so it’s all good? I feel like it’s in the lower thousands, but I could be wrong.
My husband and I are both W-2 employees. I went on the IRS website and used the withholding calculator early last year. We owed $205 dollars to the US and got a refund of $90 from the state. My goal was to break even and not get a huge refund, or worse, owe thousands. I’d say we came pretty close!
Yeah, that’s not bad at all! I used to just enjoy the chunks I’d get back every year instead of risk it myself. The pain of losing a few dollars of interest wayyy outweighs the pain of owing thousands of dollars by accident! haha…
Your situation is different in that you deal with it quarterly. As soon as we know we have all forms, we get taxes done ASAP, even though we pay. I don’t like it hanging over our heads and want it out of the way. We got it done in February. Once done, we don’t have to think about it any more until next year!
I pay both state and federal quarterly taxes but have them automatically debited from my savings account on the day they’re due so I don’t have to remember to pay each time. Thus far I haven’t had a problem with it. It just needs to be set up once a year prior to the 1st due date in April. If you’re interested, use eftps.gov to pay your federal taxes this way.
I was all set to send off my estimated tax, but then I found out that don’t really have to this year. We can use the carry forward loss from rentals to offset my freelance income. Next year I’ll have to start sending in estimated tax.
Well that’s something!
More important than the taxes, Sorry for the loss of your cousin.
I was pretty annoyed with my “seasoned” accountant for missing a huge deduction, in the tune of over $3k (probably saving me a few 100s if not more in what I owed to the government). I pointed it out to her the day she returned my file, which also happened to be the Friday before Tax Day (and also 2 weeks after we first met to go through my tax docs). She tried arguing with me that it wasn’t legit, but I did my research and knew it was. When I finally got my point across after a few back-and-forth emails, she admitted that it should be deducted but said she would need to file an amended return since she already sent my documents in. Ahhh, so now I understand why she didn’t want to add that deduction. More work for her! Lesson learned in this situation: 1. Do you research & get educated on taxes so you can review the experts work or do it yourself. 2. File yourself! I could’ve filed everything myself and saved money on the tax professional. Safe to say, I won’t be returning for “her” service next year.
Wow, not fun!! Good for you for not only catching it, but DOING SOMETHING about it too – that’s key. I go in waves of laziness and have very purposely *not* spoken up even if it means getting money back if I think it’s too much of a hassle, haha… but for a few hundred dollars it would be worth it every time! :)
I used to have to pay estimated taxes, and one quarter I just got lazy and didn’t. Thankfully (?) I wasn’t making much money so the fine/interest was very small.
Our taxes are not yet settled. :( We realized very close before the deadline that we had not received a W-2 that we should have – we thought it should have been a 1099-MISC and was under the cutoff so we weren’t looking out for any form and didn’t figure out what was really going on for quite a while. Anyway we paid our estimated tax due and filed an extension and are just waiting for that one form to come in so we can officially file.
Wow, STILL no W-2?? That’s incredible! It’ll be time to file this year’s taxes if they don’t get their act together and send it soon! Jeez… Though I’m sure you could still file if you knew the #’s and all, right? Or are you unsure of that part?
We knew the amount of pay that would have appeared on the W-2 so our 1040 is complete, just waiting on that form to supplement. We’re still not sure if one was issued originally or not and the employer is being suuuuper slow at issuing another one. If it was issued it might have gone to our old address if they grabbed it from the wrong part of their database, or possibly we overlooked its arrival. Or maybe they didn’t issue one for some reason/oversight.
We had to pay $1000 for freelance income which isn’t that bad since we made a lot. Next year will be a lot easier since we turned our company officially into an s-corp and we are expecting twins.
Awesome! That’ll do it :) Congrats.
Well, isn’t that a kick in the pants. Oops! I did my taxes early, so I didn’t have to worry about them, but I also don’t have to deal with quarterly payments. When I did do them in order to remit sales tax for my business, I remember a few times I missed the days. Stupid moves cost us money.
We’ve all been there, I think! Good luck with that extension, if that’s still an option.
Prepared by February 28, paid by March 15.
(Love your name!!)
Wow, your taxes are so cheap, I live in Australia. I earn $72,000 before tax and I pay $20,000 in tax, I get about $1,000 deductions so that’s $19,000 tax bill a year for me. I claim everything I can but I still pay a lot, I don’t mind *too* much because the government does so much for us, but sometimes (in particular tax time) I wish I was paying its a little less.
$8,600 a quarter is cheap? I mean, I do get a ton of write offs with our business and what not, but that’s the first time I’ve heard my payments are cheap, haha…
Maybe you thought it was per *year*? I just updated the post to add that just in case others think the same. Cuz THAT would be cheap AND awesome :)
Ah, this is not nearly as bad as I thought it might be. I’m definitely sorry to hear that you’ll be paying fees to make this right, but am glad to find that you’re a human like the rest of us :)
You don’t need me to say it but take it as a learning experience and move on
As a self-employed, you can contribute as much as 25% of your net earnings from self-employment (not including contributions for yourself), up to $50,000 for 2012 ($51,000 for 2013). That’s a direct quote from IRS website.
I’m so confused by the low, low amount you paid in taxes. I guess it’s a function of being self-employed and all of those writeoffs. You would choke if you saw how much I pay.
(See my response to Sharleen above – I think y’all are seeing the amounts listed *per year* instead of *per quarter* – a big difference! :)
Ahhh. I hate you a lot less now, haha.
Thank you? ;)
Hey J. Money – So sorry to hear about your cousin. :( I can definitely see how this would slip your mind since you *just* paid your quarterly tax. My taxes were really confusing this year because I had my freelance income, and I had my foreign income since I live in the Caribbean right now. But, I went home to visit family over the summer so I had not spent enough *days* in the Caribbean to claim it as a tax home. Still not sure if my taxes were 100% correct, but I did as much research as possible and even wrote them a note explaining the whole crazy thing. I’m sure my friends at the IRS will let me know if there was any confusion. :)
HAH! You know they will :) And thanks for the thoughts regarding my cousin – she was WAYYYY to young to be taken away, so sad for her husband and kids :( Life sure is unpredictable at times – we are blessed to be healthy and breathing!! Even more so on a tropical island somewhere like you ;)
That’s so sad! :( Life is definitely unpredictable; that’s why it’s a good idea to live it up for sure!
I’ve forgotten to send in my estimated taxes once, too — so don’t worry about it, you’re not alone. After that happened, I started putting reminders on my calendar, so now I get an email (from Google) a week ahead of when they’re due.