Owing Uncle Sam

Last night at my part-time job I came in to start my shift and the client my co-worker was working with was crying.  My co-worker asked me to double check the tax return so I did...everything was correct so I confirmed the client's worst nightmare:  she owed the IRS $8900.  She took a lump sum distribution of her deceased father's 401k and bought a condo cash.  She thought she did a good thing (and she did) but she did not consider the tax man.  She was hysterical and crying...it took a while to discuss her options and finish the tax return because she was freaking out big time.  Because of her tax bill she had to postpone her wedding.  I want to use her example to talk a little about taxes because owing taxes becomes a mental health issue depending on what you owe and your options.  Here are some things you can do so you don't develop a mental disorder as a result of dealing with the tax man.

• If you are going through a major event in your life, Set up a consultation with an accountant, financial planner, or tax preparer to find out how it's going to affect your taxes.  Some life events may help your tax situation and others will put you in a situation that you may owe taxes. When I say life events I mean, getting married, having kids, job promotions, inheritances, retiring, losing a spouse or child, your child turning 17...you can even go to a H&R Block or Jackson Hewitt office.  Just see SOMEBODY!
• If you're making more money, make sure more money goes to Uncle Sam.  Period. Go to your human resources and change the exemptions on your W-4. The less exemptions you take, the more money comes out of your check.  Zero exemptions is the most.  Beware some jobs take less taxes out of your paycheck than they should (they have a formula so I've heard) that might put you in a bad situation with the tax man.
• Midway through the year, take a look at your income and your withholding and have someone give you an estimate of what you might owe in taxes so you'll have time to get the amount of money you need to pay the tax man.
• If you're self employed or an independent contractor, send in estimated tax payments.  Period.  I doubt you want to pay the tax man everything during tax time.  Estimated tax payments will help you reduce what you owe. Check this out for more info and find a tax professional if you feel like you're reading Greek: http://www.irs.gov/pub/irs-pdf/f1040es.pdf 
• If you owe, DON'T FREAK OUT AND GET MAD! The IRS will work with you!  I owed a good chunk of change and they were quite nice to me.  You can set up a payment plan with the IRS. You can pay as little as $25 per month.  You can mail your payments in or have them take it out of your bank account.  The IRS will also keep your refunds until your debt is paid.  Better that than them garnishing your wages and seizing your assets.  DO NOT UNDER ANY CIRCUMSTANCES IGNORE THE IRS NO MATTER HOW MUCH YOU OWE! You will be sorry if you do! Check this out and find a professional if you don't understand:  http://www.irs.gov/pub/irs-pdf/f9465.pdf 

As Benjamin Franklin said "There are only two things certain in life:  death and taxes." Owing the IRS is not a death sentence and it's preventable if you have competent professionals to help you.

Signing off for now...

Take care,
-Kimmy

Everyday I'm Hustlin...

Working...we spend the majority of our lives doing it.

 

Are you doing what you love in the meantime? 

 

If so, awesome!  Are you taking steps to be the best at it as you can be?  "What do you mean?" you ask...well, are you continuing to increase your knowledge on your area of expertise?  Gaining knowledge is a never ending thing because new methods to do things are released everyday?  Continuing education is the way to go in order to remain at the top of your game.  It also shows the higher powers at work that you care about what you do and open to change.  Change is inevitable so you might as well go with the flow and learn what's new. 

 

If you don't like your job, what are you doing to change your current situation?  What do you need to do to get the job you want?  Do you need more education?  Research your educational options, there are too many schools that offer evening, weekend, and online courses for you NOT to go back to school.  If there is a will, there is time and there is a way.  People who truly care both about you at school and in your life will support you and help you make it work so honestly, there's no excuses to not go back to school if that's what you need to do.  Do you need experience? Volunteer!  If you're willing to learn hands on and work for free, the company or agency will most definitely consider you as an option for a paid position when it becomes available. 

 

Another question:  Is your work your life?  Your ENTIRE life?

 

If you answered yes, this is not good.  If you do not allow yourself time to unwind, you can wear yourself out.  Burnout and exhaustion are not fun.  Your body WILL FAIL YOU whether you want it to or not if you do not make time to rest, eat right, exercise, take time-outs, or have an outlet to let all the stress out.  STRESS KILLS! Your health will deteriorate, and by health I mean physical, emotional, and psychological health.  On top of that, people do not like to be neglected for work...kids, friends, spouses, family...you gotta find time for them after you punch out. 

 

Don't bring work home and don't bring home issues to work!  If it cannot be done by the time you get off, leave it for the next day.  If you have job responsibilities that have many deadlines, you may need to reevaluate how you manage your time at work or just say "I can't do it it's too much".  Your boss may be mad but companies don't want to fork out the cash for hospital bills, doctor visits, or therapy sessions either, if they're truly in it to make money.  If it's truly too much, maybe it's time to find a job that's not so demanding.  Work will always be around however you only have one life to live.  Soooo...don't check your crackberry or email once you leave the office!  You may like it!

 

If you hate your job to the point that your bad attitude brings down everyone else at work, it's time to leave.  I don't care how much or little you make, too much time is spent at work to not be happy about going.  Do some soul searching and figure out why you're unhappy.  Do you not like your position or the company you work for?  Do your coworkers drive you crazy because of personality/work ethic differences?  Once you figure out what make you unhappy ask yourself "can I leave?" and if so, update your resume and find something else whether it's a transfer or moving on to another company.  If you cannot leave, you gotta change your attitude.  Talk with your boss about your unhappiness with your job.  Any truly decent manager/leader will listen and help you.  If they do not, proceed to move on to another job.

 

The bills gotta be paid no matter what's going on so you might as well enjoy making that money!

 

Just some things to think about...

 

 

Here are some links to help you get a jump start...you're welcome!

 

http://www.indeed.com/ - it's only the best job search ever!

www.onlineuniversities.com/ - online schools

Google search "universities for working adults" and see where it takes you!

 

Take care,

-Kimmy

It's Tax Time!

What does a counselor know about money!?

THIS counselor knows quite a bit about money.  I used to be a financial representative and was in financial services for 7 years (unfortunately)...the bills had to be paid somehow but I digress.  My part time job is doing taxes.  I'm not going to tell you where to protect the innocent but I love the job.  The company treats me well and we have fun.

Anywho, back to my original point:  tax time!

Tax time means TAX REFUND CHECKS!!

With that said, I just want to make a point.  If you've been planning on how to spend your refund check since October, you may need to reevaluate your financial situation.  If you spend your tax refund check on things to cover up the fact that you're broke, again, you may need to reevaluate your financial situation.  If you're eligible to receive the Earned Income Credit, yes it makes your tax refund check look nice however to qualify for it you have to be living BELOW POVERTY LEVEL!  Last I checked, living below poverty is rough living.  Again, you may need to reevaluate your financial situation.  You're supposed to break even at tax time however I understand Uncle Sam is on the bottom of your list of bills to pay. If you're tired of the cycle, reevaluate your money situation! If you don't have the slightest clue about money, go to the bank. All those fees you're paying fund those people's salary so use them! If you don't like banks I say get over that foolishness...sometimes you have to do things you don't want to do to get where you want to be in life.

I know the majority of people are honest people struggling to get by however another point I want to make is claiming other people's children on your taxes.  The maximum number of kids to get the big refunds is 3 so the people who have more sell the other kids to people who don't have kids for a portion of the refund.  The feds know you do that mess that's why there is so much paperwork to get the EIC credit and the tax prep fees are more than you expect...they're trying to stop people from doing that foolishness.  A word from the wise of claiming kids (this includes deadbeat baby daddies and baby mamas too):  if you cannot prove in writing that you provided more than have of that child's support for over 6 months of the year in the event of an audit, don't claim that child! If the IRS figures out that you're claiming stuff you're not supposed to claim, they're going to make you pay that refund back in full ASAP! They will take all your future refunds until they get all their money back and they won't let you claim the credits in the future even if it's legit for up to 10 years!

I just wanted to give you a couple of things to think about while you wait for your W-2s...

Take Care,
Kimmy