rosedraws wrote: 
I WAS part owner of the company. When the legal shtuff hit the fan, I resigned, so I could try and recoup the money I loaned the company to get started.

I am now self-employed, however my 'real' job has nothing to do with the company in question, before or since.

 cc_rider wrote: 


What is your connection to the company?  Part owner?

Are you self emplyed, and the matter is related to your business?

Okay, I have a question for you tax experts out there. I am involved in a costly legal matter, to settle the assets of a dissolved company. In the course of the settlement, I have to pay one of the former partners a considerable sum: more than $10K. Plus of course my legal fees, which are likely to exceed $10K. In exchange for this ransom, I get nothing. That's right: diddley.

Here's my question: how do I handle the legal fees and settlement money, tax-wise? I think I should be able to deduct the legal fees from my income taxes, that's simple enough. But the settlement money is trickier: I think I need to send the schmuck a 1099, so he has to pay taxes on that income, but how do I do that, and how do I deduct it from MY income?

The accountant who has been handling the company has been practically worthless. No doubt I'll get faster response from an RPeep. Or a turnip.

 oldslabsides wrote: 

 islander wrote: 
And no doubt she loves you for it.

 Pyro wrote: 
That's what automatic withdraw is for. I set mine up for the day after payday. Money comes in by direct deposit, money goes out to ING and starts earning me interest. It doesn't sit around where it's easy to get to be a temptation and it's still liquid enough that I can get to it in an emergency. When the balance gets big enough and the opportunities are right I put it in a CD, or invest it, or take it on vacation, or whatever.

My work history has been up and down. It is a real comfort to have a pile of cash to use if necessary. Once you get that stash you get pretty protective of it - it becomes it's own discipline. I think long and hard about purchases (Mrs. Islander would say I'm cheap), and I often wind up thinking that the comfort of a couple months of padding is worth more than the shiny trinket that will be worth nothing in a year.

islander is right, it's better if you end up owing, but I know I don't have the discipline to save money to pay at the end of the year.  So I let Uncle Sam "save" for me.  It's true I don't get any interest on my money, but since I would NOT have saved it (and gained interest) anyway, it's moot.  I intentionally claim zero deductions.

For me, April is a time when I know a little EXTRA money will be coming in.  It's worth the "loss" of interest, to me.

 MrsHobieJoe wrote: 

 rowdydaisy wrote: 
Tell!  Tell!  What did he do?

 steeler wrote: 
Good.  I think I'm still paying my 2005 taxes off...God Bless America!

Extensions filed.

The guy I used this year is an ex-IRA tax analyst. He saved me a bunch of money. I still had to pay but not as much as usual. I totally understand about not being able to pay quarteryly. I need to find another line of work.

 islander wrote: 
Actually, this is extremely comforting!  Thank you. 

 AliGator wrote: 
Even in France.  *sigh*

Better now??  I hope so. 

 rosedraws wrote: 
 
Welcome to my world in France. I know I've written here about how great the French health care system is, and it is, but what you described was our reality. Our health care was never in question, so that was never a worry (which is why I so love the French system), but everything you just wrote hits home. My ex and I were making what looked to be a liveable wage, but it was enough that we didn't get any of the "social safety net" breaks, it was barely enough to live on, AND we got slammed with taxes.

 rosedraws wrote: 




Sorry to hear about your dilemma. It’s odd how our society works, and not at all fair. I know it doesn’t feel like it, but it is better to owe than to get back. Look at it this way, when they send you a refund, that literally is ‘your money’. It’s money you overpaid, and that’s all that it is, no interest. On the other hand, if you are putting pen to check, you are paying back an interest free loan from your uncle Sam. You didn’t even have to apply for it, you just took it.

I know that’s a small consolation to you right now, but hang in there – there are opportunities for those who stick it out.

I did my taxes a month ago, but I didn't file because we owe a lot, and I was hoping I had done something wrong.

I've combed through it again, and tried lots of creative accounting, but I can not get that bottom line to change.  Time to set up a payment plan.

 

So here's the thing.  I do believe in the tenet, "I don't mind paying my taxes.  With them, I buy civility."

Except that, if I pay my taxes, I can't pay my BILLS.

We are on an extreme budget to try and scrape down our debt load and possibly maybe hopefully please stay in our little house. 

But I realize that I can't balance my little budget if I have this additional tax payment!  I don't know what's left to pare down.

In 2007 we went WAY in debt because of bad income.  And we got all our taxes back.  Yippee.

In 2008 we made enough money to not go further into debt... except that I now owe a pile of taxes.  ie, If I had paid my estimated taxes, I would simply have gone further into debt again. 

It's amazing how we continue to live in this noman's land of making what looks like a liveable wage, but it's enough to not get ANY breaks, and therefore really ends up not being enough to live on.  It's so immensely frustrating and it just feels so WRONG. 

I'm trying not to get depressed about it.  But my income has TANKED again, and I'm having a hard time keeping my head up. 

My mantra is this:
1) Let go of expectations. NO ONE promised that life would bring me enough money to get by.  Life has promised me one thing: I will experience things.  Good, bad, whatever... life doesn't care... life doesn't judge... it's just experiences.

2) I discovered that letting go of all expectations can deplete a person of their hope... so I am endeavoring to find positive input and good things to set my mind on.  It's not always easy.  I'm working on it. 

I heard on CNN that the average amount folks are getting back is $1200 or something like that.  WOW!!  And yesterday, I helped my daughter with her taxes, and found her an extra $300 (with brought her right up to average.  She was SOOOO happy!!!) 

So, I hope all of you are "average" in this way. 

 miamizsun wrote: 
Thanks for posting this, Zeff.

Of course, you and I both know they put people in jail anyway for violating a law that doesn't exist.

Taxes are a great source of pain for me and my clients. In fact so much so that I'm seriously looking into the viability of an aggressive tax practice.

A nice interactive tax illustration of where and how you tax dollars are spent/wasted.

A film/documentary on the IRS, you'll never look at them the same way again.