Geez I worked a lot of hours in 06. My wife did the same. Also we opted to use a 1 time deal to cash in our 401 K savings to pay off credit card debts and such. Payed off 3 credit cards in full. (good thing as far as monthly payments are concerned). Freed up about 400 bucks a month.

To make a story short, All that extra income put us in a way higher tax bracket We saw this coming and figured it would be ok..

We usually get a few grand at tax time so we were ready for not getting anything this year..

LOL, I owe the IRS almost 8 grand. (this is a rough estimate). So much for doing anything to my stang this year..

And needless to say I got 11 weeks to pay this off.

I gotta drink nasty bush lite beer now...

Shulda left my nest egg in the nest I guess..

 

Damn!!

That suck's for sure.

 

No offense but why didnt you save some of the money you took out to pay the taxes you where going to have to pay.

I hate tax time, I havent done mine yet, but with this year and last year I could have almost paid off my house for what I paid Uncle Sam.

 

i did mine and got the returns back already.

 

I got mine done last week and should be getting my return soon. It took me all but 10 minutes to file online.

 

welcome to my world. The IRS is really nice about setting up payment plans. Just do the paperwork and send a payment and you'll be all good. The California Franchise Tax Board on the other hand is a PITA of galactic proportions... be glad you don't have to deal with them.

 

Oh Lord. Who the heck told you to cash in your 401k? That was a costly misstake and should only be done as a last resort. You get nailed for a 10% penalty right off the bat, PLUS pay income tax on the entire amount. On top of all that, you loose all future growth from your balance which might be another 10%...20% a year.

Did you know that you can "undo" this? If you could deposit the money back into your 401k by 4/15, you can get all this back. But check with a tax account.

 

Went from 20% tax bracket to 25% tax bracket
Yep that's what we did. Against my gut feeling but, Hey you can't take it with ya. I'll have this debt paid in full by April, plus I'm putting way larger amounts in my 401k than ever before. If I live to the age of 67 I will be well compensated.. For right now I'm working for livin, livin and workin, and sometimes I get a weekend off.

No sweat here, between me and my wife we made 80 K in 06. Bills come and they go....

Plus we paid off large credit card payments (in the range of 20 K) so I can work 40 hours again and still be in my lifestyle comfortably..

 

wait, if you cash that check, it sucks for you? >_< damnit.

Oh well, last year I was a minor and only worked about 6-7 months on crappy minimum wage jobs so i only made like 10k, my return won't be too much, so...i'm spending it ;x

But yea, my grandmother does my taxes for me, i gave her my w2 forms today...