The Best Lesson I Learned From Doing My Taxes
The year I worked as a freelancer was the worst, because they TOOK my money at the end of it. I was so confused, like, "There is literally no way I could have predicted this would occur!" I was on someone's payroll the next year, but I had been so scarred that I nervously also paid my quarterly "estimated income tax" on the freelance income that had ceased to exist. So then I got my normal return AND my EIC return, and it was twice the free money!!! Is wrong somehow? So that's how I learned I basically don't even have a brain, just a giant face-shaped goldfish bowl on my shoulders, with one sad, dumb goldfish swimming back and forth. —Anonymous
So I figured out a couple of years ago that nothing really bad happens if you mail your taxes a day or two late. Is that stupid? Am I the only one who sort of thought that if you tried to mail your 1099 any time past 11:59 p.m. on April 15, the mailbox/your brain would instantly explode/incinerate? Like there's some sort of spiritual punishment and/or IRS Special Ops SWAT Team waiting to strike? OK, maybe I was. It actually turns out that the IRS just calculates whatever the late payment penalty is and then sends you another bill. Which is irritating in its own way. But still. Figuring out that the IRS doesn't have some supernatural powers sort of chilled me out about taxes a little. —Simone Eastman
The first time I did my taxes I was working a ridiculously low-paying nonprofit job, so it took me two minutes and I got a $500 return that I spent on a last-minute trip to a music festival. I learned that that sort of thing is best not shared with my parents. —Angela Serratore
I totally have a guy who lies on all your forms and gets you more back than you basically made, and I used him two years ago but have been so scared of an audit ever since that I can barely sleep. All my friends still use him, though, because they're greedy assholes.
Also, doing my taxes makes me feel like an idiot for not having any sort of retirement/IRA/401K or anything. I will be poor when I die. —Anonymous (a.k.a. Living in Fear of Audits)
I haven't ever learned anything from doing my taxes, because each year I send everything late and sloppily to a faceless attorney in the city I grew up in, and then they send me a bill so large I'm not even going to say what ballpark it's in. And then when they email me follow-up questions ("Ms. Zimmerman, can you please sign your name on the orange sheet we sent you 19 weeks ago?"), I try to respond so quickly that I "make it up to them." Because if I'm so up-to-date on the computer, how could I possibly be as stupid as I seem from the way I handle everything else? So I guess instead of "I haven't ever learned anything," it’s "I learned to convince myself that tax people respect me because of the speed at which I email." Ha. Anyway, how do I do taxes? —Edith Zimmerman
I do a fair amount of freelance work, so I can deduct a lot of expenses from my taxes. That’s great, but it also requires me to figure out everything I’ve spent in those categories. Which in turn involves lots of receipts and bank statements and such, and can be a gargantuan task if you save it all up until the last minute, which I obviously do because why would I ever deal with taxes unless I absolutely had to? So for years, when I couldn’t put it off any longer, I’d force myself to spend one very crabby Saturday afternoon wrangling my year's worth of receipts.
That is, until a few years back, when I had a breakthrough. You see, I’d just finished reading Eat, Pray, Love (I know! I had to! For work!), and one thing she said that resonated with me at the time was the whole “I will not harbor unhealthy thoughts anymore” bit. So I was working on keeping those pissy little ships of pessimism out of my mental harbor. And thus when I found myself staring mournfully at a mountain of crumply receipts, I chose to change the way I looked at them. I realized that each expense represented a mundane little moment from the past year — a fun business dinner, a book bought for “research,” and, whoa, an insanely expensive drunken cab ride home from Midtown. It was like reading a diary or maybe more like looking at a very poorly organized scrapbook. I found after a while that reflecting on all these little purchases got me thinking about the bigger moments and also made me feel like I’d actually done a lot of fun things in the span of those 12 months. (I know, I’m a regular Elizabeth Gilbert over here!) I will not go so far as to claim that this revelation has made me look forward to doing my taxes, but at least now I don’t dread the whole thing quite as much as I used to. —Cassie Murdoch
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Dude, Cassie! RomCom script! Starring Katherine Heigl?
Please not Katherine Heigl.
Oh, taxes. I waitressed for 6 months a couple of years ago, and my favourite moment when I was doing my taxes was the moment when I realized I could get away with not claiming my tips as income. It felt so dangerous to not tell the government about all my money!
Ok, so I was a unadventurous 20 year old doing my taxes by myself for the first time. It really didn't make a difference because I didn't make enough money to even pay in taxes that year, so I got everything back anyways. But it still felt dangerous to me at the time.
I learned that you will get taxed on your AmeriCorps education award. You will probably still be broke when that happens. The IRS will work out a payment plan with you that will take you about a year to pay off, but you will do it and complain to anyone who will listen.
Also, can this post be used as a general tax Q&A? Great, thanks collective Hairpin minds!
Q: I filed my federal taxes, no problem (thanks, TurboTax!) but I'm wondering if I have to file in my state even though I 1. haven't had a paying job here at any point (grad student) but 2. actually reside here. So, because I'm a resident (with no job), does New York State still need me to send in my tax paperwork?
@ohsweet: Magic 8-ball says: "Signs point to yes."
@ohsweet The Americorps website and all informational materials should have an asterisk next to "education award" that reads *TAXABLE INCOME ISN'T THAT CRAZY, YA'LL? because it is so unbelievable that that would be taxed.
Also I would say yes about turning in paperwork for new york.
@ohsweet Yes! You have to file in any state you were a resident in (or worked in) for the year in question.
Take it from your friend Tuna, who live in a certain state (we'll just call it State X) for two weeks in 1999 and was paid one paycheck in 1999 for work done in that state in 1998. Well, the federal government got all tattle-tale on my ass and told State X how much money I earned in 1999 and because I didn't file a return in State X for 1999, they helpfully assumed that all that money was earned in State X.
Fast forward to 2006 when I try to buy an apartment and am surprised to find out there's a tax lien on me in State X for unpaid 1999 taxes! Many phone calls with State X and the IRS later I got a $17 tax return but it wasn't worth it. File now or pay later.
@everyone Thanks, y'all! Put that crap in the mail just now.
@ohsweet So like, let's say that someone did not report their award. Or even awardS. And like, they were wondering how much tax that a person who DID report them ended up owing the government? What are we talking here? Hundreds? You can just give a range, I have this friend…
@hotdog: 30% +/- 10% ?
@hotdog $500 is what I owed. Blerg.
@ohsweet GAH AMERICORPS and that education award taxation SCAAAAM. I am in pain just remembering it.
If anyone sends me an etiquette/human relaysh question concerning their time as a suffering AmeriCorps volunteer, I will move it to the top of the queue.
@simone eastbro Such a scam! It was money that wasn't really ever money to me and yet AND YET I got taxed. Cruel.
so when i was like 20 i thought that having a kid was like FREE MONEY for taxes….no one told me you actually have to WORK to get that free money…i know, right!??
*me walking into tax preparer place*
him: how can i help you?
me: im here to file my taxes!
him: your W2, please.
me: i dont have a W2…i didnt work.
him: ummm..that you dont have any taxes to file…
me: but i have a kid!??
him: O_o and?
me: WTF! well dont i get credit or something??
him: yeah, IF. YOU. WORK!
me: uggghhh!!! BYE!…wait, are ya'll hiring?
@ThundaCunt, I kinda love you
@cunts cuntlove!
Guess what! You have to pay taxes on your unemployment unless you specifically ask them to withhold taxes on it. DID NOT KNOW THAT LAST YEAR. We would have gotten a huge refund this year, but it is going to my outrageous 2009 federal and state tax bills. Yay.
@antarcticastartshere Unrelated to your post, (which that sucks and I will tell my mom b/c she is on unemp)but just wanted to compliment you on an amazing avatar. Truly amazing.
In my 20s, after receiving my W2 and having my mind boggled by how much I earned that year (even without declaring the vast majority of my tips) and then boggled again by realizing I had nothing to show for it, I realized I was probably partying too much.
This year (sorry, Turbo Tax sponsor!), I learned that you can do your state AND federal taxes for a total of $15 using Tax Slayer.
And for the savers/planners out there, I also learned that doing your taxes is a lot easier if your retirement is in a Roth IRA (unless I'm doing something wrong…).
@Tammy Pajamas Oh, big yes to the partying too much moment of realization. "I do not make that much NO WAY do I make that much! If I made that much I would have real things like real adults instead of just hanging out at the bars all the- ohhhhh."
@Tammy Pajamas I used Tax Slayer last year. And then I got audited. Needless to say, I went the Turbo Tax route this year.
I have learned that my mother has a wonderful tax accountant that finds me the extra hidden moneys and I have never done my taxes and this is shameful because I am almost 30. I love you Mom.
@Katie Walsh My mom does my taxes too. She makes me sit next to her while she does them and we pretend like I'm helping. But I filed for an extension by myself this year, so that counts for something, right?
@Katie Walsh I was just going to make a comment about how I am almost 30 and my dad still does my taxes every year, and how I maybe feel sort of bad about that. I am glad to see that I am not the only one!
@Katie Walsh Yeah, my dad still does my taxes (or rather, my dad's accountant does) and I'm honestly scared of the day he'll tell me to do it myself. W2 what?
@Katie Walsh Today I told my Dad, "Next year, pops, maybe you can show me how to do my taxes." And he paused, and was like, "Naw, it's alright, I can do th—" "OKAY! PHEW!"
I've done my 1040ez since 18 like a big boy, but then this year- my first year of mostly tips- I learned that there's literally a zillion exemptions I can claim? Student loans, medical, holy moly. Mentioned this in an email to mom, and she left me a voicemail yesterday asking if I want dad to do my taxes for me in turbotax sometime this weekend. I've got a sweet phone date lined up tomorrow with the pops.
Yay parents!
If you live in NYC but work for an organization based elsewhere (and maybe I'm the only one, but I'm so scarred that I feel I MUST spread the gospel), make sure that your employer remembers to deduct NYC Local Taxes from your wages. Like Angela, I work a ridiculously low-paying nonprofit job, but this year I OWED like a thousand bucks because my employer hadn't been deducting those fun "privilege of living in NYC" taxes. Bye-bye, fancy humidifier I've had my eye on…
@km1312 Yep, ditto this, last year. My boss's assistant filled out my paperwork for me (why? I don't know) and forgot to make sure NYC taxes were taken out. 'Course I didn't realize that then, because I had just moved to the city and how could I have known NYC would want to take even MORE of my money? Come April: Hello, giant red number!
I am scarred, too. Gospel must be spread, indeed. Do your own research and your own paperwork!
@km1312 I learned this at the same time that I learned that sometimes filing jointly as a married has negative results. The price of both these realizations was nearly a tenth of my salary, on top of the federal and state taxes that had already been withheld. Testify!
I learned that if you ever take two years off of work to, like, be in college, you still need to file something that says you didn't work. Even if they tell you that you don't. Because what will happen is that years later the IRS will audit you and say, "Excuse me, your majesty, Miss Cuntness, but you didn't file any taxes during the years of 2002 and 2003 and so we are basing your estimated tax return on your filing for year 2004 when you had your very first grown-up job, and also charging you interest, and you owe us six grand." And then you will say, "but I didn't work those years! I didn't have an income!" and they will say, "can you prove that you didn't have an income those years, as previous to this you worked as an independant contractor?" and you will say, ". . . ."
@HRH Your Cuntness
I really hope you didn't pay that. You don't need to file anything saying you didn't work.
@NeenerNeener I did.
I am a sucker, and I got scared of the IRS.
Oh, taxes. Here sits this accountant on the 14th, reading the Hairpin? I gotta go. Sigh…
@NeenerNeener I'm one too! Yeah, I hear there are these things called taxes that people want me to do. Bleeeah! I'm going out for BBQ.
@quickdrawkiddo
BTW, it's National Hug-an-Accountant Month! I did not know this until yesterday. Then a friend told me that they considered it a risky proposition to invade the personal space of anyone who hasn't slept in three weeks. C'mon, it's only two… No love. I'm especially happy with the little kink Emancipation Day has thrown into my weekend!
I learned that it is insanely complicated to file as a US citizen who is a resident of another country. Even though we (me and the government) both know I don't owe them anything. They still want to stick their noses into my business and keep track of how much I'm earning over here. You have to fill out about 20 pages of forms with many numbers and a giant zero at the very end.
The lesson I learned is: could it be easier just not to file? What on earth could they do about it?
They could nail your ass to the wall when and if you ever move back to the U.S.
@Bittersweet Hmm. Better throw something together then. Fortunately, we get an automatic 2 month extension. Plenty of time in which to forget to do it!
Wow. I learned that most folks can recite an entire 30 minutes of dialogue from a TV program that they saw on the TV last nite but haven't a f-ing CLUE as to how taxation works. And while I'd love to dump this nasty load at the feet of the public school system, I'm gonna swicth it up a bit and go for bachelor number #2 – your parents (generalization ahead) should have maybe cut out some of those extracurriculars and sat yeh down for the ol' tax talk. Or taken it back to square one with "this is how you fill out a personal cheque"…..yeah, I work in a FI (financial instituion) and am truly terrified/mystified by the fact that most people out there are allowed the autonomy of dressing themselves in the morning, forget conducting thier own fincnail affiars.
Ooo's don't know how it aww works? Nobody has evah esplained it to ooo's? Aww MUFFIN! Yeh managed to make it to this site, read an article and conjugate/post a response; so figure it the f*@k out!
Yes, I didn't get my coffee this morning and yes, I am SICK AND TIRED of having to fix other people's crappy tax issues while they yell at me like I am the IRS personified.
I'm gonna go yell at random traffic for a while now….
@Ella Quint But Ella, how are speculators supposed to generate billions of dollars for their wealthy clients via quasi-legal, nonsensical financial juggling if people knew how money works? We can't keep moving money into the richest 2% in the world if people stop getting upside down in mortgages!
@Ella Quint and this is why i send my accountant flowers on april 16 every year.
@Ella Quint I feel you, but I want to take the affirmative/here's how you might start road.
I certainly suck at math – I put words together for a living. But after I got my return sent back for messing up (yup 1099s and not even for COOL stuff), I sat the fuck down and figured it out (with many phone calls to my aunt accountant). I do them by hand now (yes, I go line by line, but ONLINE – two years in a row.)
YMMV: I think if had to deal with receipts or anything beyond W2/1099s, I'd probably pay someone, because then in theory I might be making enough money that paying someone wouldn't hurt as much. But now I understand how it generally works, and I really really like having that knowledge.
This year because of several life coincidences that will never happen again (ended school in first half, working/paying student loan interest second half), I got MORE BACK than I paid. Because I checked every. single. goddamn. line. Totally legit too. Credits for education expenses, deductions for student loan interest, the other thing that is not Making Work Pay credit, but functions similarly.
It can be done. If I can… (insert self-deprecating koan here).
@Ella Quint Yeah but I'm surprised people are allowed the autonomy of dressing themselves in the morning and I'm an English major (Literature concentration, not like those Creative Writing hippies).
@fairlyalarmed
You guys dress yourselves in the morning?
Suckers!
@Too Much Internet Ahhh, TOO much sense!! You just stop it right now b-4 you give away the caramilk secret.
@Lady TPain – Thank you! You are the bright and shiny beacon in my shit-cloudy day! Might want to consider reproduction if yeh haven't already – don't mean to get all up in yer bizniz but I have concerns about the future a la "Idiocracy"…
@fairlyalarmed – and by virtue of the link posted, @ lemonyfreshk too.
Horrific joke but I'll do it anyways:
"What's all orange and red and looks good on Hippies? FIRE."
@atipofthehat Eh, I only do it in largely failed attempts to ward off the ennui of being an English major.
@Ella – GOOD HEAVENS. I love it.
Anonymous, I love your sad dumb goldfish! We're gonna go get bloody marys.
You know what would be awesome?!
Getting rid of tax day: http://www.fairtax.org
@lemonyfreshk gross.
I have learned that my dad is really good at filling out the same forms that leave me confused and calling him from 5000 miles away asking, "Do I put down a 1 or a 2?????"
But probably most importantly I have learned that when he asks me if I worked last year, what he means is did I have a legal job where the government knows I was being paid. This year I found out that I was working under-the-table that whole time I was a pizza delivery driver, which explains why I was paid in cash at the end of each night.
When I started having freelance income, I tried to do taxes myself and ended up owing a ton last year because I hadn't paid any estimated taxes. So this year I went to an accountant, and he was so helpful, so much better than math at me, and so worth what he cost ($250, but he got me a refund which I wouldn't have gotten myself because I had no idea what I could deduct, what a home office was, etc.) that I'd now consider not going to an accountant (if you have freelance income) similar to being my own gyno. It's okay to not know as much as they do, it's not your job (unless it is).
I learned to take taxes off the top of every freelance check RIGHT AWAY. Because that shit adds up, and eventually you owe the IRS your first born child.
Yes this. Also, I take the too few and very far between big checks and put them in a savings account. If you're a freelancer and not saving at least 40% of what you make to pay taxes, you will be very unhappy one day. I mean, more unhappy than usual.
Oh I wish I had known this back during my first year as a freelance journalist, many years ago. I hired an accountant and he dropped the bomb on me like he was my doctor telling me my baby had inoperable brain cancer. I cried, then I took out a bank loan to pay it off. I'm still paying off that loan. I can't even talk about it without feeling like I need to vom.
this year i learned social security benefits are taxable. which is ridiculous, since they taxed you when you made that income, and then they tax you when they give it back. (yes, i love and hang out with my parents and their friends.)
I learned that grad school stipends are taxable, are only disbursed three times a year and not during the summer, and go by the academic year rather than the calendar year, which makes estimating taxes an utter bitch. Also I learned that I hate being a grownup, even if it is a fake, grad-school-attending grownup.
@aleanbluezither This reminds me of the terrible time when I was a financial aid counselor for graduate students and they would be all "What am I going to live on during the suuuuuh-muuuuuuhr????" And I would be all "I don't know, maybe you shouldn't have spent your student loans on a Vespa?"
@theharpoon "off another unsubsidized loan, sucker!"
@simone eastbro They always already used all their sub and unsub loans, and weren't enrolled in classes (so, you know, they couldn't take out more). I should probably clarify that these were law students. Of course they were law students. GOD I LOVE NOT DOING THAT JOB.
Claiming a relative as a dependent only works if you provide more than half of their income. If, instead, you're just providing them with half of your income, well then that is just a "choice", as the nice financial lady told me while I cried all over her office.
Also, "independent" on your taxes is apparently not the same thing as "independent" on your FAFSA. The IRS will happily take your money for that stupid mistake though, no worries!
(P.S. Yes, these two were lessons learned together!)
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