For the past, oh, I dunno….several years? I was making good money. I had one steady job after another and was able to pay my rent and bills and still have money left over. In fact, I actually had EXTRA money taken out of my paychecks every pay cycle, by both the Fed and State, in order to get a little cushion each April. A little bonus, if you will.
Now, I always ended up owing State taxes anyway, mind you. But the payments were less and less each year, once I figured out that I had to withhold more. So I’d owe the State, say, anywhere from $100 to $200 per year, but I’d get refunds from the Fed that more than made up for that.
Well…not THIS year. This past year, I was unemployed. And just to make my rent, my first five months of unemployment had no Fed or State taxes withheld. After that, I opted to move my 401K over to another investor, so did a rollover, reinvesting everything but $5,000 which I needed to survive. When I took that $5k, I did so with the understanding that I’d owe 10% this year, or $500. Well, silly me, I figured, “Gee…I always get at least $800 back from the Feds each year, so if I end up owing $500, that means I’ll still get at LEAST $300 back in my refund…”. Silly me.
Seems that when you’re hit hardest, and need the most, you end up getting hit hardest yet again.
I just did my online tax return and found out I owe NOT just $500…but over one grand. Because I opted to have most of the taxes withheld from my measly unemployment payments, and my measly temp pay, and my measly new paychecks at my new job.
Why is it that they’d kick a girl when she’s already down? Why?