Taxes: Paying for the First Time in Ages

Every year for as long as I can remember I have done my taxes myself on taxact.com and gotten a nice refund back. I even turned my not so tech loving hubby on to taxact a few years ago. This year we had a ton of things for our taxes, not to mention our first year filing jointly.

After spending a few weeks waiting for all our W-2s and his 1099, I plugged in everything as usual and didn’t like the resulting number in red glaring back at me. A number that we owed. Ouch. Stupid 1099, even for 4 months, cost us a fortune.

Gone are the days of getting back $2-3k. Hopefully temporarily.

We held off on filing hoping a solution would appear to reduce that horrible number. Well, yesterday we went to H&R Block which, while helpful, was also EXPENSIVE. We spent a couple of hours working with 3 ladies who knew various things about 1099s and managed to reduce that horrible amount owed by about $300. However, in the end we owed them $350 in fees. Um, what?

We also learned from the client at the next booth that adopting a child earns you about up to $10k in a refund. Wow. I had no idea. And we want to adopt siblings. Insane. But also I’m sure there’s people that foster/ adopt just for the money. Sorry, tangent…

It was a very expensive lesson to learn, but from now on you can bet I know how to track all our deductions and expenses from his 1099. And with my new job, I might have a 1099 as well. Ugh.

If you or your spouse/significant other are a 1099 employee, how do you track expenses, etc? I need to implement a system immediately and find receipts from the past 4.5 months. For once I’m thankful for hubby’s pack rat wallet tendencies.

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5 comments on “Taxes: Paying for the First Time in Ages

  1. Marie

    I try to scan all my receipts and keep a digital record of all tax related items. Charitable donations, transportation and fuel, professional dues, work uniforms and accessories , etc. U get the idea. Maybe a shoe box to collect these important receipts and records?

    1. Becca

      Thanks, Marie! I’m thinking a shoe box will be the best way to collect everything and keep a running excel spreadsheet to tally everything up. Are you on a 1099 or you just keep everything just in case?

  2. Kelly

    Did you pay estimated taxes on the 1099 earnings? That could be why it sucks. I learned the hard way this year that I didn’t put enough away, even though I was making quarterly payments. A character building experience, to be sure! Haha. We deduct a portion of my rent that I use for my office, my internet, a portion of utilities, and health insurance. I don’t keep receipts per se of these things, but I could easily pull up the past bills online if I were to be audited.

    1. Becca

      We didn’t know anything about estimated payments until, umm, yesterday at H&R Block. We don’t have any home office expenses, but he does only use his car to trek back and forth to work. We use my car for everything else. So all that stuff was able to be written off. But for the ’11 taxes, I’m going to keep a damn detailed log and I bet we’ll discover we could’ve written off a lot more for the ’10 taxes. Live and learn, huh?

  3. chanele

    I have nothing useful to contribute here because taxes make my eyes glaze over. I need to suck it up and take an income tax course, particularly useful in family law, but I fear how much I will hate it. I think it’s great you can qualify for such a great return if you adopt.

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