Ah, spellcheck, you’ll be asked to work hard tonight because filing today’s taxes was taxing and the recovery cocktail couldn’t wait for me to finish dinner and the blog. Taxes were so much simpler (and sometimes cheaper) when I was a millionaire. (Tax Inequity Increase)
Selective amnesia may account for a simpler tax season back when I lived off my investments; and yet, the perplexing minutia involved in figuring out taxes for the self-employed consultant/artist is enough to inspire a suite of coping mechanisms and a release from logic. The US Tax Code isn’t supposed to make sense, but this is what we get to deal with every year.
Rather than try to describe the bizarre nature of the task, I’ll simply provide the chronology of working my way through via TurboTax, and maybe summarize the experience if I can find some order in the chaos.
Begin the tax weirdness that was – My Bizarre Tax Day 2015
- Wake up knowing that, on a workday Sunday (Rule of 7) that would normally be full because of work, I am required to find time to calculate and pay my taxes.
- Rather than get caught up in the anxiety immediately, roll back over, close my eyes and remember to focus on necessities: rest, food, work, then taxes. Realize that I can simplify the self-imposed task of writing the blog by writing a chronology instead (which is what you’re reading.)
- In proper frugal fashion, after a fine breakfast, begin the creation of homemade soup by simmering yesterday’s chicken carcass and last month’s veggie scraps to create a healthy stock and broth. Spend the next eight hours listening to it barely burbling in the background.
- Using work (which is necessary) to avoid paying taxes (which are legally required.)
- Watching tweets about taxes go by as asides to my regular newsfeed (Pretending Not To Panic, #PNTP)
- As part of the Pretending Not To Panic newsfeed come across an article about the federal debt.
- Unsustainable Federal Debt needs my taxes, but if the government isn’t sustainable eventually taxes aren’t collected.
- Reminding myself that this entire task was delayed until April’s pay for March’s work arrived. The check arrived Friday, April 10th. Collecting every dollar readily available in the hope that I can pay in cash, or on my credit card.
Work on clients’ communiques because I’m not the only person working on a Sunday morning.
Work in the museum (the History of Computing in Learning and Education Virtual Museum, where I’m the project manager) as usual, and particularly because there’s just been a major conference (Museums and the Web 2015, aka #MW2015) and set of opportunities.
Gotta eat. Might as well so some laundry while everything else is going on.
Make a purposely procrastinating phone call to commiserate with a good friend about taxes. He’s just going to have to file for an extension. Good news or bad, take your pick.
- Finally get to working on taxes, grudgingly.
- Maybe I should put on the right music first.
- The day started off with blue skies, and now is overcast with building clouds. Looks about right.
- Cue the blues on Pandora.
- Notice the symptoms of an anxiety attack. Yuck.
- Sort through TurboTax’s emails to figure out which one to actually respond to. In the last four months they’ve sent me fourteen emails. Nag.
- Sweat kicks in. Shed a layer.
- Forgot my password. Nothing new considering I only need it once a year.
- Confirmation number via email. That was easy enough. It’s almost as if I’m not the only one who doesn’t keep track.
- Time to buy TurboTax Home&Business yet again.
- Call up a friend to share a tidbit they were trying to figure out that I learned from TurboTax. Evidently, it is already paying for itself.
- Past the Personal Info section and dive into Business.
- Realize that Schwab probably went paperless because I can’t find the forms in my manila folder.
- Compile the nuisance yet necessary 1099s. Some of these forms are for less than $20. It probably cost far more than that to produce, verify, mail, and then verify them again.
- Interesting side note: half of book sales were from Europe. Well, at least I got some business insight out of this.
- After all of the 1099’s are entered, TurboTax produces the first tax estimate. About a 66% increase in taxes on a 31% increase in revenue. The details will shift this. Right?
- The anxiety symptoms have risen to audible burps.
- Now, time to figure out the business incomes that weren’t reported on 1099s. One of the consequences of having so many jobettes: consulting, teaching, books, photography, writing, miscellaneous, is that there are lots of little boxes to fill out even when they don’t add up to enough.
- After all of the additional revenue, the estimated tax has climbed 86% for a 60% increase in revenue.
- The good news, thanks to TurboTax, my business’ gross revenues went up 81% from 2013. Maybe I’m doing something right, even though I’m not making enough to have enough in the bank account to pay the taxes. Ah, but the deductions will make the difference – I hope.
I need a break.
Oh dear, the dreaded self-employment tax, the bane of my recent tax history, the tax I didn’t know existed until I had to employ myself because I couldn’t find a full-time job. It is up 82% from last year. Ouch. And that’s an understatement.
- The business section of TurboTax is over. My headache is climbing. Begin deductions, and hope that alleviates the pressure.
- Side note: Glad to see all the renewable energy credits, even if I can’t take advantage of them.
Still working through deductions and the estimated tax payment hasn’t budged. Please budge. Please.
- Drumroll. time to tackle the healthcare section which is now influenced by ACA, aka ObamaCare. Does it make things worse or better?
- There’s a drop of ~5%. The right direction but far from making a difference.
Hit Continue and the tax comes down 32%. Whew, thanks!
- Done with Health. Yeah, living in America feels that way.
- There’s a quick check on the risk of triggering an audit based on regular patterns. I bottomed the chart for audit risk. Random audits happen. (And I suspect I’d get money back.) But then, maybe writing about taxes raises the risk. Does the NSA talk to the IRS?
- The total is bad, but I expected worse. I don’t have enough to pay it directly. It could squeeze onto my credit card, which I could quickly pay half of. Ah, but there’s a button for an installment plan. For the first time, I make that request.
- Much commiseration. I’d prefer to do a 50/50, but they lead to an all or nothing situation; so I guess I’ll avoid the credit card and ask my government for some consideration. Let’s see what the delay does.
- Hmm, no form, just a request for a phone number and a preferred time to call, as long as it is on the hour.
- Terms, and I get to suggest them? Okay. How about one-twelfth per month and due in the middle of the month?
- Given the choice I choose to pay by check – for control.
- “You’ll hear from the IRS about your request within 30 days (or longer if you file after March 31). ” Sounds like a one month delay. Breathing room.
- “You can use the installment plan only once every 5 years.” Unfortunate, but understandable.
- Hit the button to file and suddenly find out that:
1) I have a payment voucher with a due date of 72 hours from now for the value of the one-twelfth payment.
2) I have a payment voucher with a due date of 72 hours from now for a quarterly estimated tax payment.
- Eep. It’s a good thing I didn’t wait until the 14th, because at least I can make a sprint to the post office tomorrow to express mail the checks. Forms only have to be postmarked by the 15th. Payments, from what I can tell, are due that day.
- At least the total payment due in 72 hours is less than a full payment. This is a new experience for me. I have no idea how owning the government money really works. Yet another episode opens.
- Done, and set everything for a while.
- Relieve the tension by calling my two of my closest friends, mixing myself a martini, having dinner, and watching a bit of nonsense television (Netflix.)
Doing this every day would definitely be unhealthy. TurboTax makes it easier, but answering the questions without knowing if the final number will fit inside the bank account is taxing. This has definitely been an exercise in coping mechanisms and perspective shifts. By the end, my taxes went up by less than my business revenue reversing the trend from last year when I paid some of the highest taxes on the lowest income in my life. At this rate, next year I may continue the trend where I’m making enough money to pay lower taxes. If my stock portfolio recovers (come on MVIS), my income may increase while my taxes decrease. Maybe that won’t be the case. Maybe, as I make more (being an optimist), I’ll pay more. That’s acceptable when I making more than enough. It’s been years since I made more than enough. My truck, house, and health are proof of that. But, the government has received its share. This year, the government’s share will be a bit delayed, I think.
Rather than putting this all behind me now that I’ve filed, it looks like tomorrow will be a workday dash to the post office, possible negotiations with the IRS over the payments, and regular payments that extend into next tax season. Tax Day just became Tax Continuum. Yet another episode in Middle Class to Millionaire to Muddling By (the working title to the sequel to Dream. Invest. Live.).
I think I’ll mix myself another drink, and make some popcorn after I clean the stock pot. Whew. If you’re in the US, good luck with your taxes. If you’re not in the US, I’ll assume your country’s tax system is perfect – just because I’ve seen enough tax weirdness for a while.