Monday, February 27, 2012

Taxes, Taxes, Taxes

All around me, I'm surrounded by taxes.  And no, not just at work.  Every year, I prepare dozens of returns for friends & family.  Last year, it got so bad, I spent every night working on some one's return.  I had to put a limit on it this year.  Especially since I can't charge for it.

In case you forgot, it is tax season.

And while the private sector is working 80 hour weeks trying to prepare every return possible, I don't escape the madness entirely.

Friday night, a group of us went to see "Act of Valor."  (Side note: Great movie, but super intense.  I needed a Xanax a third of the way into it!)  And we ran into one of my husband's co-workers who always proceeds to tell me his latest tax scheme.  All which are *mostly* valid. 

Most people I know get refunds.  (Some huge - again, can I just say that the Earned Income Credit is welfare?  Just had to point that out one more time.)

But it seems a lot of people, more than normal, are having to pay taxes this year, me included.  It's one thing if you're expecting it.  But if you're not, it can be crippling.

People have this fear of the IRS, not entirely unfounded, that if they owe the IRS even a penny, the Service will seize their house and maybe one or two of their children.  They freak out, even break down into tears. 

If you should find yourself in this position, here's what you should know:

1. File your taxes, ON TIME.  Even if you can't pay them.  This is one of the biggest misconception I deal with.  People even get their returns prepared and simply don't file because they can't pay the tax due.  Even if you know you can't pay, file your return.  There are penalties for not filing as well as not paying.  But you could at least avoid the Failure to File Penalty it will save you some money in the long run.

2.  The IRS has payment plans.  If you call and ask, they will set up an Installment Agreement and it's practically guaranteed, as long as you pay it off in a reasonable amount of time. 

3.  Going hand-in-hand with #2, if you owe money to the IRS and are due a refund, the Service will keep your refund.  So say you have an abnormal year where you owe the IRS $4000.  Set up a payment plan for $250/mo.  By the time next year rolls around, you will still owe at least $1000.  If you are due a refund then, the IRS will keep the amount you owe to satisfy your balance.  Strangely, that surprises a lot of people

4.  You can't declare bankruptcy on money you owe the IRS.  Especially in today's volatile economy, you may have a booming year in one year and be destitute by the time tax season gets here.  I'm no bankruptcy attorney, but tax debt, for the most part, can't be included on a bankruptcy. 

5.  You'd honestly, be better off getting a low interest credit card and using it to pay off your tax debt, and then pay the credit card.  The IRS charges compound interest, just like a credit card company.  Meaning, they charge interest on interest.  Couple that with penalties (and the interest on penalties) and you can end up with double the original balance - quickly.  If I was your personal tax advisor, I would tell you it's much better to owe Chase than the IRS.  If you miss a credit card payment, it won't be nearly as costly as missing a payment to the IRS.

It's never fun to owe money, but owing taxes can be especially frightening.  Hopefully, these few tips can help you if you find yourself in that situation.


In the interest of full disclosure, I'm currently on drugs.  Lol.  I went to the doctor today and was told I may have mono.  I'm on some antibiotics and a serious slew of pain killers.  So if you notice spelling, grammatical errors, missing words, or just something plain ol' wrong, give me a pass this time, mmkay?

Thursday, February 23, 2012


So, it's been a crazy three weeks...

After much debate, we sold our house

Every day the negotiations went on, I though for sure I'd be updating you all with a "It's sold!" post.  And every day came & went. 

It was truly one of the most stressful processes I've ever been through.

They offered a pretty lowball offer.  That we couldn't even entertained.  So we countered, then they countered, then we countered...  You get the point.

And to top it all off, we will be renting from the buyer till our house is complete.  So then we had to figure out how much rent we were willing to pay, how long we wanted to stay here, how much security they wanted vs. how much we were willing to pay... 

And I swear sometimes, dealing with real estate people is like dealing with emus.  Ever tried to talk to an emu?  They look at you like you're the crazy one...not speaking English or something.  THEY ARE AN EMU!!!

But after two weeks of painful negotiations - we all signed on the dotted line.

I heard angels singing.  And no, that's not a metaphor.

I pulled a Gideon, laid a fleece out, and secretly asked God for Him to find us buyers that would rent to us till our house is built.  And He did. 

But even that miracle wasn't enough for me.

I was feeling really bad about the sale.  Nauseated.  Because the buyers picked maybe the worst possible property management team in the NRV to manage the house.  (They shall remain nameless - but they are "explosive.")  I really wanted to cancel the whole deal.  So I asked God for one more thing.  (My mom calls it "Flipping over the fleece.")

One more virtually impossible thing - just to know for sure this deal was the right one for us.

Sell my parents house.

My parents house has been on the market for 2 years.  (Yes - 2 years.)  They've had a few offers but they all fell through. 

I am not lying when I say this, my parents signed a contract on their house 2 days later.  One with virtually no contingencies - except an inspection.  And the buyer - a guy I kinda/sorta dated one summer in high school.  So weird.  (Although he never went to my house, so he probably has no idea the hours spent on the phone with him in that bedroom!)

Ok, God.  Got the picture - Loud & Clear.  Why am I so shocked when He does that?  Anyone else get surprised when they ask for something and get it?  Ok, I'm glad it's not just me.

So I had no qualms whatsoever about signing the final contract.  After all is said & done, we may walk away with $30.  Literally.  But in this market, I'll take it. 

We close on the house hopefully in mid-March.  We will be in this house till May 2013. 

Just enough time for us to complete this:

Our Dream Home