But the worst part is I thought I’d be getting money BACK with all my tax stuff this year :( Only cuz my accountant literally told me I’d be receiving $4,000+ thinking I had over-paid the whole time, then realizing they had failed to include a pretty important piece of paper in their calculations – the Paypal 1099 (a new thing they began doing). And since it showed an “income” of almost $50,000 last year due to Love Drop transactions (which of course we gave away to all our recipients), it completely changed the whole outcome here.
Not the biggest deal since I truly owed it to begin with, but def. a swap of emotions within a 24 hour period ;) And it’s hard to complain much anyways considering we had a killer year of business profits when all was said and done. Turns out we brought home over $130,000 from all my online projects this year, compared to 2010’s $80,000 record! (Though I did have a 9-5 back then too which pushed us even higher). So obviously this is all a good problem to have. Especially for my first year being self-employed :) (Can you believe it’s been over a year already??)
Anyways though, here’s the recent damage with the tax situation:
- Federal: $3,156
- State: $2,587
- Personal Property Tax (for my LLC): $300
- Tax preparation: $655 ($355 for personal, $300 for Love Drop)
- State of WI: $114 (owed to me – woo!)
Yet another reason why it’s good we had so much cash stashed away! For all those who have been questioning my Net Worth updates recently ;) I’m just freakin’ glad this tax season is over once and for all – I can’t tell you how much I hate it. I’m totally cool with paying my fair share of what I owe (and for the record this was the 1st time in 8 years my accountant slipped up), but the whole thing just gives me the creepers. I wish it would just magically file itself every year and save us the trouble ;)
Oh, and here are my new quarterly payments going forward too now:
- Federal: $6,250 (up from $4,500)
- State: $1,750 (up from from $1,000)
It makes me miss the good ol’ days of automatic paycheck-deductions and HR departments… something you lose when you switch to being self-employed. But what are you gonna do, eh? Can’t stop trying to make more money just cuz you’ll owe more. Just means you gotta keep pushing even MORE to make enough to cover all the taxes too! ;) And the more any of us do that now – while we’re young and full of vigor – the less we’ll have to rely on ourselves later!
How did you all come away this year? Anyone have to pay MORE than my $6k? Anyone get $6k+ BACK from the gov’t? I know the gurus say that’s bad cuz it gives them a “free loan” over the 12 months and all that, but it’s still a much nicer surprise than the opposite (as you can see from today’s post). So if you happen to fall into *that* boat this year, I give you a mighty pat on the back, and ask you to treat yourself to something nice for me this round. Sound good?
PS: Stay tuned for my SEP IRA update… that’ll be another chunk of change used up to help soften the tax situation (but at least THAT $$ goes back into the bank of ourselves! And it’s kinda fun ;))
(Photo by bradleygee)
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Damn that’s a big difference and even though you technically did owe it to them it had to come as quite a blow. Thanks to the loss of my job income this year I ended up getting almost $3k back. I actually didn’t expect that much either so it was quite a nice surprise.
I owed almost $10K a couple of years ago, it was horrible. I paid taxes out of every paycheck but I came across a windfall and didn’t pay enough.
Ick. Well, at least you owe a bunch because you made a bunch last year!!
I haven’t done my taxes yet. I have all the paperwork ready, at this point it’s just a matter of sitting down and plugging the numbers in. Since my husband and I both have multiple jobs, some of which don’t withhold for us, we generally over-withhold at our main jobs to be on the safe side. We usually get about $2500 or so back, I suspect this year will be pretty much the same.
UGH- I have my appointment in like an hour to find out what I owe, so all morning I’ve been double and triple checking my folders to be sure I have everything that I need. I’m already getting a headache.
Dude! That is a total bummer. I would totally have a “case of the Mondays” after that unexpected shell-out.
My tax refund is going to be roughly $2,000. It’s all going towards that blasted wedding though!
That would take a bit for my brain to go from woo hoo return to I owe what???
but I can’t tell you how excited I am about how well your self employment has gone. That’s amazing. I know you must be terribly disciplined to work at home.
Man that sucks, I hate when you are expecting something and the total opposite happens. Total mood killer. We should be getting around $1500 back this year, and its going straight to our camper loan. Will be nice to see a big chunk of that gone. On a side note- Not to shabby with your self employment. Keep it up!
I haven’t done my taxes yet because I am still waiting for K-1. In all likelihood I will probably get around $1000 back from the Fed and owe the state $600. This is due to having a lot of dividend income, which makes it hard to accurately guesstimate my paycheck withholding, and couple that with you can’t have state taxes taken out of them. So I over withhold on purpose (yeah I know its “bad” but I don’t want to owe the Fed more than $999).
I have never had a 6K tax bill, my record high was $3K or so (when a company I owned some stock in got purchased, got nailed, but I still “won” in that transaction).
I owe $12k this year, including some penalties.
We are dual income earners which always makes the math harder, and then I got a nice bonus at the end of the year from which not enough was withheld.
Major Bummer!!!! I got $5141 refund. We put in the $2141 and the rest came from the additional child tax credit. I changed our withholding after I filed the return, though!
Doing taxes this weekend…more than likely getting at least $4k back from Fed and about $1k from CO. We’re those stupid people who use the Feds as a savings account. *lame*. Going to the mother ship in April and going to take advantage of that face-to-face fniancial advice…and NOT do this again…
My federal refund was less than expected, but I am getting my exemptions closer to the point of max paycheck size.
Sucks about your bill and having to pay taxes on that charity money.
We owe $7500 this year after selling an apartment building that only caused us trouble. It’s still a blow, but we’re glad to be done with it!
Nothing like the emotional jolt of thinking you were due back money only to find out that you actually owe. The very bright side in this situation is how much your income increased. Way to go!
I’m in the same boat, although I was expecting to have to pay a big tax bill from the start. I’ve only barely started putting together my tax documents because I saw how much I earned last year on my home business. I just hope I can scrounge together enough deductions to get it below $10k. That’s a nice reminder of how poorly I managed my money last year.
Oh MAN that stinks. Don’t get me started on taxes… my tax guy (soon-to-be former tax guy) messed up my 2009 taxes so bad! At first he said I had to write a check for over $13,000, so I did. Then the IRS kept sending me notices that they had my check, all of my W2s and 1099s but never got my tax return (that was sent in the same envelope…). That went on for about a year. Then my tax guy realized he screwed up anyhow and that the IRS owed me $10,000 of the $13,000 back, so I had to file an amended return. Then they sent me that check for $10,000 (very nice to get btw). Then last month I get a letter from the IRS asking for $1,100 plus penalties and interest for the same year!
There’s something seriously wrong with the system… I’ll stop before I hit the character limit on comments, haha. Namaste…
I didn’t realize you were in WI. Welcome to the state.
That’s a big swing!
We’re going to have a pretty big tax bill this year since we earned more money on the side than we expected. But thankfully, we saved a lot of that extra income to cover the taxes :)
Wow! Tell me more about the Paypal 1099. I didn’t get anything like that. Do you have to make a certain threshold maybe? I am NOWHERE NEAR your income level.
Ouch, that sucks big time! :(
I abhor tax season and taxes in general. I haven’t done our taxes yet this year and last year I waited until the last minute. I tend to procrastinate on this every year. We usually don’t get that much back, but one year we did have to pay over $3500 because we were in a higher tax bracket. Bull!
It’s our first time filing taxes, so we are still pretty lost as what to do. I guess it’s a good thing we did not make much money this year since of school and all. Any suggesting for first-timers?
Ugh, that sounds irritating… sorry about that :(
We haven’t filed yet, but I suspect that we’ll owe more than your 6k. My wife got a sizeable bonus last year, and she opted to receive the whole thing (as opposed to having taxes taken out right away). So, that money’s been chilling, earning some interest this whole year, and now it’s about ready to be given to the government.
Wow, $130,000 is great for your first year of self-employment! Keep rockin!
I really do hate taxes! They really make me want to take a year long vacation and just chillax.
Great job on the $130,000. That’s revenue right? Have you figured out what is left after operating costs eg operating profits, and then net profits? This was the hole thing about my post “Quit Your Job And Die Alone”. Paiiinful!
$130,000 is a great number I should say. But taxes always represent pain and suffering. Sorry!
You did great as far as income! Our damages were $954 to the US Treasury and $200 to the State of California. And we paid right away, because I can’t stand having to think about it any longer than I have to.
oh that sux. I owed a few grand in taxes last yr. this time, I’m getting maybe $1300 back. gonna be good and put it towards debt!
Seriously, how the hell did you make $130k?! Jeez!!!! Can I eat, too?! (lol, way to go!) don’t sweat it, J. You got a tax deduction (er–child) on the way to offset that $6G!! Lol
P.S. I appreciate my 3 tax deductions! We got back $2700 state and $4300 federal!
That’s not a good surprise! I would have thought the “Love Drop” giveaways would have been considered a business expenditure… and a write-off.
Wow man that hurts. I would feel an ache in my gut for at least the whole day after thinking I was getting money back. I have been finishing up my taxes with all the deductions I can before I see the final number. It is looking like I will get a little back, but as of right now it only looks like $200 lol. Still better than the fucking ass-load Turbotax said I owed when I started ONLY putting in income. Good thing I am used to having multiple jobs and I take a lot of tax out every paycheck. Can’t wait until next year, because I will be able to use school for deductions!
I will probably finish my taxes the weekend after next, when I am back home and technically have Spring Break from 1 of my classes.
Thanks for all the comments/feedback everyone – really enjoyed them!
@Money Infant – Well that’s a silver lining! :) Do you plan on getting another one, or you gonna try going on your own for a bit?
@Michelle – Right? Hard to complain when we’re fortunate enough to GET that much, but yeah – still sucks to dish it out.
@Stephanie – Well that’s cool :) Good job w/ witholding extra too to make up for it just in case – I like having that nice surprise at the end with getting back your money.
@Emmy – Awww, well hopefully now it’s all over and you’re free to decompress! Did it go well?
@Frugal Fries – Haha… at least it’s a one-time wedding! And you’ll be surrounded by all your loved ones! :)
@jolie – You are too good to me, thank you :) I am very disciplined, and sometimes even TOO much! (As I sit here at midnight to respond to comments, haha…). I hope things are going well with you too, Jolie! Anything new and exciting to report?
@DebtnTaxes – Thanks! And that camper sounds exciting :) We used to have a pop-up camper growing up and I loooooooooved it as a kid. Don’t think I could do it as well now a days, haha, but man was that thing my favorite growing up :)
@Brian – I don’t think it’s bad at all getting money back at the end, MUCH smarter in my books to be honest with you – esp since the average person wouldn’t invest or save it anyways throughout the year, ya know? I think it’s just fine :)
@Jake – Well Congrats and Ouch at the same time to you too! Haha… I feel your pain/excitement ;)
@Renee – Awesome! Congrats on the newborn then, eh :) I’m looking forward to that one too next year, hehe…
@Trinnie – There is no ounce of me that thinks that is bad, my friend, but you do whatever you think is best for ya :) Would you have REALLY used that extra money every paycheck towards something productive had you gotten more?? Most times not, so if this gets you to save more or pay off more debt or whatever at the end of every year, so be it. But let’s see what our fine USAA friends say about it :) Let me know, k?
@John | Married (with Debt) – Yeah, but luckily we were able to write off a TON too. Or else it would have been up to almost double ;) We gave out a lot last year.
@Katie – Well that’s nice at least! Sometimes it’s better to just wrap things up once and for all and move on. So hopefully the future holds a lot more peace for you guys :)
@Melissa @ Little House in the Valley – Yup! And I guess I’d do it over and over again too if that’s what brings the nice salary every time :) Hope things on your end are going well too!
@Modest Money – Haha… and you’ll do better next year, right? :) Not sure how you organize everything over there (I used to do it with spreadsheets), but check out Outright.com if you’re interested in some good online tracking of income/expenses for that side biz. That’s what was holding me up the whole time, though it may be different for you.
@Nick – What????? What a mess!! Jeez… I’m sorry to hear that man, I would be so irritated :( At least it *seems* you get most of that back in the end though yeah? At least the way it looks now, before another 5 checks come in the mail? Haha… what a weird situation bro, hope it gets cleared up for ya FAST :)
@DaveE – Nah, I’m not – Love Drop was just legally based out of there due to my biz partner living there :) Though I have visited a good 4 times over the past 12 months and liking it more each time! :)
@Dollar D @ The Dollar Disciple – There you go :) It helps being smart, huh?
@Kacie – Awww, you very well could be one day young lady :) There is a threshold there – I believe it’s $20,000 in income and/or over 200 transactions or something like that. If you’re unsure, you can log in and look for documents or tax documents or something and see if you find one in there. Probably not though if you’re way under the $20k mark. (And remember – I work every single day, mostly 10 hours a day, on this stuff – so if I’m not bringing home a lot of money something is wrong ;))
@Crystal – Sucky! I think a lot of people hate it just as much as you do, and also procrastinate ;) Don’t you just wanna peel off the band-aid though and knock it out? I used to wait all the time, and now I just get too impatient. Even doing all this now, 3 months in, is way late for me – I usually just wanna knock it all out and forget about it for another 12 months. Bleh.
@SavvyFinancialLatina – Whew, I’m not the best person to ask that to unfortunately. I guess if things are really simple, I’d just try out TurboTax.com online and start plugging in the numbers and see if it works :) A lot of people SWEAR by them, and say it’s super-easy, so that’s probably where I’d start. And then if it was overbearing, ask around for a referral for a good accountant. I don’t know if you’ll need one in your stage with things, but I know I couldn’t live without mine :)
@BrokeElizabeth – Thanks, it def. sucks but the AWESOME part – believe it or not – is that once I “put it out there” and blog about it, my level of frustration usually goes wayyyyy down :) Haha… who would have guessed?
@Bryan at Pinch that Penny! – Well at least you have a plan! Would have been a lot worse had y’all gotten a bit spendy with it ;)
@Paula @ Afford Anything – Thanks! I’m pretty excited about it :) Even though I’ve technically been working on all this stuff for years on the side anyways, haha… but I’ll still take the compliment and put it in my pocket ;)
@Financial Samurai – That is net profits ;)
@Aloysa @ My Broken Coin – Haha, you got that straight!
@Yana – Oh yeah, excellent plan for sure. Just rip it off like a band-aid and move right back on your merry way :) Good job.
@S C – Good plan! That’ll be a nice chunk :) Thanks for stopping by.
@Serena@ThriftDiving – Nice! Congrats :) And don’t let the number fool you — I’ve been working my tail off for 4 years with this online stuff, so it’s not like an overnight thing :) Just proof that being passionate and hard working can do good things!
@Julie @ Freedom 48 – Oh, well most of it was! My accountants just forgot to include the biggest form of them all in the calculations, so it made it look like we should get a lot back ;) We were fortunate enough to be able to write off a lot which we had planned for going into Love Drop (or it would have REALLY been messy).
@LB – Ooooooh I miss Spring Breaks! Soak it up for me :) I don’t think I’ll ever get over being out of college, haha…
Wow, you made a nice income in 2011!
I’m not done with our taxes yet, but I’m sure we owe the IRS a nice chunk of change. I’ll have to start sending in withholding this year so I don’t owe such a big amount.
That’s huge man! Add the $130,000 to your wife’s salary and you guys will crush $200,000 and get to a $1 million net worth in no-time!
Dammit! I was just about to ask you for a $6,284 loan.
@Joe @ Retire By 40 – Or maybe shoot for quarterly payments? I didn’t realize it until I was fully self-employed, but my accountant said I got SUPER lucky that I didn’t get penalized the year before since the extra $ started to add up to a decent amount. It also helps w/ stress too, at least for me ;) (Not that it’s fun or anything)
@Financial Samurai – Well, yes to the 2nd part, but not to the 1st part as the wife has a salary of $12k ;) But at least she’s about to finish up school shortly! Hope you are well too, my man.
@Donna Freedman – Haha…. you snooze you lose.
I got married at the end of 2011 and I must say, filing single head of household makes for a much nicer tax return. I was used to getting between 4 and 5000 back every year. So, of course, I thought I’d be getting that back this time. But alas, when my accountant/tax preparer/older brother called me he said we were only getting back $1500.
Luckily, he just called back and said that he found something he could do with our rental, so we are now getting back $3000. Still not what I’m used to, but better than paying.
I can’t understand how though. I could understand if my husband made more money than me, but my W2 shows $5000 more in income than his. So, you’d think since the average is less than it was as me alone that I’d get more back.
Oh well…just so glad I dont have to pay! We have some landscaping and plumbing to fix, so thats where ours refund will go! Plus, maternity leave starts in July, and after talking to HR yesterday, I am a little concerned with money during my leave (considering 6 months off completely from work or a 10 month reduced schedule leave)
This is the perfect example of why you should not spend money today because you are expecting money to come in at a later date. Sure, it looks like you are getting a tax refund, but until you sign the return, don’t count on it. And sure it looks like you are getting that inheritance, but don’t count on it until you actually have the check. Too many people spend money today because they think they are coming into money tomorrow.
Apparently I have yet to figure out my W4 deductions because I got a federal return of $6959 and a state return of $1079. Time to ask for professional help…
I took the money and paid off the last of the credit card debt then split the rest between my emergency fund and my IRA (if I was smart I would have included the contribution on my return as you have until April to contribute if I’m not mistaken). I am single w/ 3 kids and a mortgage, so obviously that skews things a little.
Haven’t received my tax return back yet but I’m expecting I’ll owe. It sucks to expect so much money refunded and them realize you have to pay!
My fiance had a scare when his return came back the other day, he was expecting $3000 back like he normally gets and only got a $300 refund. There was a lot of storming and grumbling on his part about not being able to make a loan payment, but we pulled through in the end. He always seems to count his chickens before they hatch.
@Nicole -Woah! Exciting and scary at the same time, for sure. Congrats on your little bundle coming out soon! We’re only a couple months out from ya :) I wonder how having the baby will affect taxes and stuff too? Either way, glad you got a chunk of what you normally do at least! Def. better than paying (wanna switch? haha…).
@MoneySmartGuides – YES! Very true indeed – always better to play it safe and take actions on only things that are facts. Great reminder.
@Jackson – Wow, that is a HUGE return, haha… but again, always better than the opposite :) I think talking with someone to just review your overall status and plan is a great idea, even just to set you straight again for a while. And EXCELLENT job paying down that debt and puting the rest into savings/investments – you’ve got killer motivation! Most people will blow at least half of it, haha… but maybe not the ones reading finance blogs ;)
@BG – Yikes! Exactly what MoneySmartGuides up there just commented about – you can only count on the stuff that’s 100% true and right there in front of ya! I’m glad it seemed to have worked out for you both though, that’s always good :)
That is just crazy! At least you’ll have a better idea for next years taxes, plus you’re getting back $114. It could have been worse and you could have owed them too, instead of getting a refund. :-)
We just did our taxes earlier this week – the first time that I have done taxes as an adult (or really at all – I let my mom do them for a while even after I turned 18 because she was willing and I dread the thought of doing taxes). Technically we didn’t have to file taxes this year because we didn’t make enough money (and I didn’t last year because I knew in advance I wouldn’t and didn’t have anything withheld) and it almost wouldn’t have been worth it except for two things. One, I know that me and the husband have an INS review within the next two years – the more paperwork in our name, the better, because they like that kind of stuff. And second, while we really only had $38 dollars withheld for federal taxes and $121 withheld for state taxes (which I wanted, but at the same time, is not a super huge deal for the pain of doing taxes), I was eligible for the American Opportunity Credit because of my schooling and that credit you can get a refund for even if you owe no taxes. You can get more of a credit from them if you do owe money, which is why in the past, my parents have always claimed it and then just given me what I would have gotten from the IRS to keep them from owing more taxes (haha) but this past year I was fully independent and so they couldn’t claim it anymore, so I claimed it (it’s the last year I’m eligible since I finished school and you can only claim it for 4 tax years anyways). So our measly $38 refund turned into a $1,038 refund – and that $1,000 wasn’t money that the government was giving back to me, that’s money that they’re just giving to me. It makes a huge difference – we’re going to use it to build our emergency fund which is something we’ve been wanting to do for a while, but it’s not quite where we want it to be yet (we’ve only been able to add really small amounts each month).
@Jen @ Master the Art of Saving – Haha, true true ;) I don’t mind paying even more next year either, as long as I keep making more and no one tricks me into thinking I’m getting a refund! Haha… lots of pros along w/ the madness here…
@Melissa (Miss Lissy) – Woah! Look at you go! That’s a helluva nice surprise, well done! And I’ll add a 3rd reason it’s important to file too – it’s the law ;) Haha… but good job with all that stuff, you’re more of an adult than I am since I still use an accountant! Hope the INS stuff goes really well too! All that kinda stuff freaks me out…
Haha J, I used a tax program because if you make less than $57,000 a year, there are a lot of websites that work with the IRS to help you do your taxes for free (http://www.irs.gov/efile/article/0,,id=118986,00.html?portlet=106). And yes, it is that law to file, but there are certain situations where you don’t have to file. They have a nifty tool where you can see that here (http://www.irs.gov/ita/article/0,,id=219890,00.html). Like I said, last year I didn’t make enough to need to file and I had nothing withheld so I was getting no refund so basically I would have been sending them a piece of paper that said “Nobody owes each other anything” Lol.
Hah! Well look that that – I learn something new every day :) Thanks for the tips!