Author Topic: Just wanted to vent.  (Read 5975 times)

MrBuckBeard

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Just wanted to vent.
« on: December 03, 2014, 09:08:14 AM »
I've been "getting my finances in order" for the better part of the year.  This has come with a lot of triumphs.  For example, I used to owe $8000 in credit card debt.  That's down to just over $1000, and is on track to be paid off early January.  However, it seems I keep learning about obligations that prevent me from being able to truly celebrate.  I just found out about two more, and they're a real bummer.

While waiting for the bus yesterday, I remembered that my income tax refund keeps getting taken by the government.  I knew that 7 years ago, I forgot to include a 1099 form on my taxes.  I fixed my mistake a month later, but of course as a result I ended up owing money.  At that time, my basic idea was to just have additional taxes taken out to cover this over the course of my future income taxes.  Well, since I'm on a mission to take care of all this, I called up the IRS.

It turns out, I still owe the Federal government $5000 dollars.  So I set up a payment plan, $225 per month.  I should have done this long ago, because it drops the interest/penalty rate significantly.  Plus I'm now on track to cover this in two years.  Still, that's $225 a month I had not imagined being a regular obligation.

Well, knowing I owed the Federal government, I figured I might also owe the state I lived in in 2009.  So I called them today.  They referred me to a 3rd party agency.  I owe a little over $2000 there too.  And they wouldn't work with me on a 2 year plan, the best I got them to agree to was to split it into 5 payments.  So for nearly half a year, I'll have another "new" bill of $408.20.  Plus a bit higher last payment, since interest and such continues to accrue.

Meanwhile I'm paying the minimums on my student loan, which is 100% going to interest.  I have a principal of just over $60,000. 

So anyway, I'm not so much as looking for advice, just wanted a place to vent.  It's rewarding to feel like I'm taking control of my finances, now that I'm not hiding from the things I owe.  But at the same time, it is depressing to just keep finding new things which have been there all the time.  It's almost like I'm taking care of a kid.  And I am, in a way; the kid is me, 7 years ago.  I'm supporting my past self.  Which sucks, because I was really hoping to get a better start at taking care of my future self.

catccc

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Re: Just wanted to vent.
« Reply #1 on: December 03, 2014, 09:15:17 AM »
Well, it definitely sucks to find out you owe these back taxes, but congrats to you on everything you have gotten in order.  At least you are in a position of facing the debt and killing it ASAP, instead of pretending it is okay to have.  The student loan debt is killer, though, at 60K.  That's a lot.  Are you eligible for some kind of IBR (income based repayment) plan?

MrBuckBeard

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Re: Just wanted to vent.
« Reply #2 on: December 03, 2014, 09:28:44 AM »
Yeah, I'm on the IBR right now.  Which is good, in that it dropped my payment from ~$680 to ~$325.  This has been allowing me to focus on the higher interest debts I've got.  The other benefit is that if I get to the point I can send in $680, I can at least manually apply the extra to a particular loan, instead of it going evenly out to all the loans.  That way, I can target the 6% ones and let the 3% ones stew.

Forcus

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Re: Just wanted to vent.
« Reply #3 on: December 03, 2014, 09:31:44 AM »
I'm just curious, what was the situation where you owed back taxes and didn't know about it. Not at all criticizing I am genuinely curious (are you self employed, etc.).

Taran Wanderer

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Re: Just wanted to vent.
« Reply #4 on: December 03, 2014, 09:47:46 AM »
YOU ARE AWESOME!!!  Huge congratulations for taking control of your financial situation and owning up to your obligations. It sounds like you may have some pain in the short term, but think of the sense of relief, accomplishment, and freedom you will feel as you retire some of these debts!  You are paying your future self a huge down payment on a better life. Keep up the good work. You can do it!

MrBuckBeard

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Re: Just wanted to vent.
« Reply #5 on: December 03, 2014, 09:49:47 AM »
Quote
I'm just curious, what was the situation where you owed back taxes and didn't know about it. Not at all criticizing I am genuinely curious (are you self employed, etc.).

I was self employed at the time.  It was 2009, and my focus was not on finances so much as just surviving.  I did my taxes in Turbotax, and I show an adjusted gross income of $21,832.  But that doesn't include a 1099, which I didn't notice until May or so.  Well, with income that low, you can imagine that when the tax man said I owed whatever it was I owed after I self reported the 1099, I had zero way to pay.  But I didn't exactly help myself out, I decided that I'd just do single claiming 0, and this would all "work itself out". 

But it didn't work itself out.  It just grew.  It wasn't that I didn't know I owed back taxes, I just didn't have a good understanding of the implications of that, and I also "spaced" the actual amount that I owed.  It wasn't until I called the IRS yesterday that I actually had a firm grasp at just what it was that I owed. 

Heck, even earlier this year, when I went about doing everything I could think of to take care of my financial life, it took me until just now to realize I should call the IRS.  I've really been overwhelmed with my overall ineptitude, so it seems like every 2-3 months something else comes up in my mind.  Like "HEY, I never paid for my last semester of college, I should call the university", or "HEY, did I ever pay the hospital for my emergency trip", etc etc.

I've made a metric shit-ton of progress on this stuff so far this year, so I have to keep reminding myself that I don't suck anymore, I just USED to suck.  I went to Republic Wireless.  I sold my car.  I moved 1500 miles from home and took a job paying >50k.  I have a brilliant and beautiful girlfriend.  Looking forward, it's looking up.  But because I sucked, I also have to keep looking back.

sheepstache

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Re: Just wanted to vent.
« Reply #6 on: December 03, 2014, 09:59:36 AM »
It's like what they say about crash dieting. You didn't get fat in one month, so you're not going to suddenly drop the weight in one month. These are a lifetime of accumulated debts so you have to cut yourself a bit of slack that it will take some time to disentangle them. It sounds like you're doing a good job so far and have placed yourself in a good position to continue.

pzxc

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Re: Just wanted to vent.
« Reply #7 on: December 03, 2014, 10:24:05 AM »
Please please please record absolutely EVERYTHING -- scan or make copies of all paperwork/documents you receive, copies of all checks/payments you send, keep a log of phone conversation date/times and what was discussed.  If you make any agreements on the phone, try to get them in writing, etc.

The only thing that sucks worse than paying off an old debt -- is paying it off, and then them "forgetting" that you ever paid it and trying to collect again.  It happens ALL. THE. TIME.

TerriM

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Re: Just wanted to vent.
« Reply #8 on: December 03, 2014, 10:28:54 AM »
Congratulations on being almost done with the Credit card loan!  Owing the IRS sucks, but stay positive and look forward to the date when those are payed off.   Hopefully that'll be the last "surprise."  Don't feel bad--you're not the only one that puts off finding out bad news.  But you made the call, and now you can focus on solving the problem instead of running from it.

Just keep on smiling.  You're doing great!

pksr

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Re: Just wanted to vent.
« Reply #9 on: December 03, 2014, 10:42:16 AM »

Well, with income that low, you can imagine that when the tax man said I owed whatever it was I owed after I self reported the 1099, I had zero way to pay.  But I didn't exactly help myself out, I decided that I'd just do single claiming 0, and this would all "work itself out". 

But it didn't work itself out.  It just grew.  It wasn't that I didn't know I owed back taxes, I just didn't have a good understanding of the implications of that, and I also "spaced" the actual amount that I owed.  It wasn't until I called the IRS yesterday that I actually had a firm grasp at just what it was that I owed. 


I think the amend-your-return ship has sailed, but for future reference I doubt very seriously that the calculation of what "the tax man said I owed" was correct to the penny. Their computers tell you you've made a mistake (the missing 1099) and then, I imagine, they run numbers that could in no way leave money on the table for them. Amending a return is the only way that an innocent mistake like this gets fair treatment.

Sounds like you need some quiet time to brainstorm all of the unknown unknown ticking time bombs you may have out there. You don't need to act on all of them, but just making a list might identify some of the future oh s*** moments. Sounds like you're in a great place with your s*** together (now), so I'm sure it's frustrating to have your prior self keep delivering care packages of dog doo doo. Getting a financially savvy person to brainstorm with you might be a good exercise.

Good luck with the legacy liabilities!

2ndTimer

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Re: Just wanted to vent.
« Reply #10 on: December 03, 2014, 10:48:48 AM »
Congratulations on getting this sorted out.  I am sure that right now you feel like the poster child for the, "Are You Giving the Shaft to Your Future Self?' article.

MrBuckBeard

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Re: Just wanted to vent.
« Reply #11 on: December 03, 2014, 10:56:54 AM »
Congratulations on getting this sorted out.  I am sure that right now you feel like the poster child for the, "Are You Giving the Shaft to Your Future Self?' article.

HA!  Yes, maybe I am.  I'll let someone use my likeness for a reasonable fee, assuming taxes are taken out when I get my paycheck. :P

The good news here, if there is any, is that I've just reworked my budget.  Starting from my net income, then removing my fixed expenses (rent, utilities, cell phone) and my debt repayments, I still have $1150 per month.  That's plenty for groceries, savings, whatever.  I don't know if I wrote that out the way I actually mean.  What I mean to say is, I can meet these obligations, even the new "unexpected" ones, and still have plenty of money to survive.  I'm in a better spot now, even paying all this extra, than when I was in my home state without the income levels to support these self-imposed burdens.

So, it could always be worse.  Knock on wood.

lizzie

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Re: Just wanted to vent.
« Reply #12 on: December 03, 2014, 11:44:58 AM »
I just want to join the chorus saying "good for you." Facing up to these debts and doing what needs to be done is so hard and really admirable. I have no doubt it feels like you keep struggling to your feet only to get knocked down again. But from an outsider's perspective, you look like a very strong and responsible person. Best of luck with the future.

rmendpara

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Re: Just wanted to vent.
« Reply #13 on: December 03, 2014, 12:07:44 PM »
Nothing new to add.

Good for you, dude. Your current self may be annoyed at your past self now, but your future self will absolutely love your current self.

maki

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Re: Just wanted to vent.
« Reply #14 on: December 03, 2014, 01:42:53 PM »
Congratulations on getting this sorted out.  I am sure that right now you feel like the poster child for the, "Are You Giving the Shaft to Your Future Self?' article.

too good. too good. all them feels.

greenfish

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Re: Just wanted to vent.
« Reply #15 on: December 04, 2014, 05:53:49 AM »
Congratulations on getting things turned around.

You should check your credit report. You'll get a complete list of everything you owe, complete with creditor contact information so you won't have any more surprises waiting for you.

You can check your three reports for free every year at annualcreditreport.com

Keep receipts and a record of everything you pay off and then check your credit reports again next year to make sure everything you have paid reports correctly. There are a lot of creditors/collections agencies that don't bother with updating the credit bureau for older debts, and it's simple to get the credit bureau to do if you have a record the debt is paid.