#DailyTaxTip – January 20, 2014

Good morning and welcome to my first post in the Daily Tax Tip series!

Those of you who read my posts regularly may or may not know that I subscribe to the School of Multiple Income Streams and in addition to my “day job” (and blogging), I am also a Certified Tax Preparer. Since 2010, I have been completing returns and making sure that I stay up-to-date on our nation’s tax code. Most days, it’s super fun. Other days, it’s just fun. Let me get right into today’s #DailyTaxTip so that I don’t bore you with more of an intro (this won’t even be included in future posts).

“Daily Tax Tip” for January 20, 2014:

What is the most important thing to get right on your annual tax return? If you said, everything, you are correct (that was a little tax humor). However, the one thing that sets the tone for your entire return is your FILING STATUS, so it is imperative that you use the one that works best for you. The United States Tax Code recognizes five categories for individuals to pay their income tax. They are below, with a brief explanation for each.

Unmarried Taxpayers (fall under three categories):

  • Single: Unmarried, divorced, a registered domestic partner, or legally separated according to state law on December 31.
  • Head of Household: Unmarried taxpayer who maintains more than half of the cost of a household for more than half of the year for oneself and a dependent.
  • Qualifying Widower with Dependent Child(ren): Taxpayers who maintain the principle residences of qualifying dependents AND whose spouses have died in either of the last two years (2012 & 2013) can be considered surviving spouses if they have not remarried.

Married Taxpayers (fall under the last two categories):

  • Married Filing Separately: Given some tax situations, a married couple may feel it is best to file separate returns and this status allows them to do so.
  • Married Filing Jointly: A couple that is married on December 31 may file a joint return BUT should the couple have a legal separation or divorce by December 31, they can not file a joint return for any part of the year.

Some other quick things about your FILING STATUS:

  1. It is determined by your marital status on December 31st.
  2. It determines your tax liability.
  3. It determines your standard deduction AND exemptions amount.

I hope that this Daily Tax Tip proves useful for many of you. Make sure you follow the hashtag #DailyTaxTip on Twitter and if you have any questions at all, do not hesitate to ask.

Happy Filing!

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Since 2010, Courtney has been using her training and expertise to provide affordable, accurate and ethical tax preparation services to those in her community. She firmly believes in the saying, “When you know better, you do better,” and it is always her intent to educate others on things that significantly impact their lives. 

Confession: I Hate the Term “I Fell On Hard Times”

I have sat on this information for quite a while — since 2005 or 2006 actually. Before I get into this post, I’ll share that I have disabled the comments (don’t need any extra shit and lot of y’all aren’t as nice as you think you are).

Since March 2013, I’ve been debating on something really heavily – filing bankruptcy. Since January 14, 2014 at 7:44pm (CST), I’ve been crying my face off while telling myself that jumping from the Crescent City Connection won’t end my problems (because knowing my luck, I would somehow survive even though it’s so high up and I can’t swim).

Why would something make me cry this hard and contemplate ending my life though? Like many other people, I fell on hard times (but I hate this and I’ll explain why).

As of January 14, 2014 at 7:44pm (CST), I am the Co-Signer of two student loans that have since gone into default. I could buyout my portion and some of my freedom back for a mere $8,000 (the collections agency’s words, not mine…certainly not mine) if I act fast and do it before Friday.

Except it is the middle of the week and:

  • I am sleeping on a Cousin’s couch after having been put out of the place I was staying because I wasn’t bringing any money in. Honestly, I feel that my time here has run short and since I’m not a “Priority Group” within the Homeless Population, I don’t have a bed in anyone’s shelter.
  • I have applied and applied and applied to all kinds of jobs that I can think of. Here’s the latest sting in my life – I did a tiny experiment to see if people would hire me if they thought I had a record. Do you know I got two call backs? Apparently, companies get tax credits (or breaks) for hiring a percentage of this population and even if you’re overqualified, they’ll consider you if you’ve been to jail. Those two organizations have since put me on a “Do Not Hire” list…not that they were going to hire me to begin with.
  • In addition to the TWO student loans that have defaulted, I have my own loans to worry about. I’ve been making good faith payments to my companies of like $10, $20, or $40 when the money comes my way. Yet, even though they know I’m homeless, with a struggling business and no part-time job money, they insist on telling me how stupid I am for having gone to school, got two degrees and then unfortunately, have been unable to find a job in a market where jobs tend to go to people hiring folks know and not necessarily who can do the best job.
  • I am questioning if I actually made the right decision to leave a job that physically, mentally and emotionally made me sick because there was a steady paycheck even though my hair was falling out because everyone else has said that it was quite dumb.

With all that being said, I just want to say quickly that I hate the term “I fell on hard times.” Why? Because no one falls on that and if a person says that to you in a conversation, it means that you are actually an insensitive person who comes across as incapable of showing empathy because you would “never” find yourself in that situation.

Hindsight is ALWAYS 20/20 and that’s what people don’t want to admit. But you know what else people don’t want to talk about?

The emotional toll it takes on you. It’s emotionally taxing to keep the secret because you are embarrassed. You aren’t freed by sharing this because people judge you and tell you that “you should have just used a budget” and “well that wasn’t very smart and instead of helping you and not criticizing you, I’m going to tear you down more.” You don’t feel better when you admit it to yourself either. In my case, whenever I’m adult enough to answer my phone and not send my bill collectors to voicemail, I have arm and leg pain AND a migraine and chest pains for at least 24 hours. Seriously.

As I shared in another post, had I known back in 2004 that I would be facing this mountain of bullshit in January of 2014, I’d have dropped out and…well…I don’t know what I would have done. But I’d rather live a mediocre existence barely making ends meet THAN have to deal with other people pointing out how my own personal decision-making skills and not a flawed system is the reason I’m in this.

I didn’t fall on hard times. Like everyone else, this shit hit me like a f***ing ton of bricks.

NOTE: I disabled comments because I don’t want to read other strangers who have made questionable ass decisions in present day foolishness say how “stupid” that was of me. Sallie Mae has that on lock.

My Most Expensive Financial Mistake Ever

Many people tell you that you should postpone going after your dream if it’s an unconventional way to support yourself financially. Those who love you, usually older relatives that have succumbed to the demands of everyday life, will point out the majority of people that don’t make it when following a wacky dream similar to yours (this is especially true if the road is one of creativity like artist). Yet, on January 8, 2014, I sat ruminating on some things and it occurred to me that living safely netted me my most expensive financial mistake ever.

You are probably wondering what this mistake is but if you are like so many other people in the United States, especially hard-pressed and out-of-work Millennials, then you already have an idea of what I’m going to say.

My most expensive financial mistake ever is that I went to college*.

To my knowledge, I owe roughly $104,000 in student loans (I rounded up but only slightly). Thinking about my degrees (B.S. in Psychology and M.A. in Urban Education Policy), I’m grateful for the training and the amazing professors I studied under. However, 17-year-old me would make a completely different decision about life if she knew what I know now.

That’s a hard and frustrating pill to swallow.

I’m not upset about the limited advice that family members shared with me when I pondered whether I should go to college. After all, that next step is the logical step when you are talking about a person who had been on someone’s Honor Roll since kindergarten and excelled almost effortlessly when it came to academics (Physics does not count as Physics is Satan himself in some academic form). Why would an A-student want to be an artist or a dancer? Because that’s what she spent her free time doing.

And that’s the realization that hit me like a ton of bricks.

I feel (somewhat) hindered by what society deems as acceptable and I feel exposed admitting that I am a perfectionist who seeks the support and approval of others – part of why I’m in this hot shit right now. But the great thing about being exposed is that once you let go of the shame from your confession, you can move on.

In my case though, it’s too bad I can’t readily relieve myself of this chain I’m attached to.

With that being said, I made a personal vow to myself. From this day forward, I will focus on living my joy while sharing all of my Life Fails so that others don’t have to suffer like I did. I don’t know if Sallie Mae would consider this a job but they probably don’t care seeing as I can’t tell them how much I can contribute toward that late payment. It is my hope, as always, that those of you who read this blog take something from this painfully transparent post (don’t tell my Mom though, let me…thanks.) and apply it to your life. Life is for the living and you shouldn’t have to waste your time holed up in a cubicle or chained to a desk while wearing some “approved in the dress code outfit” to make a wage that will pitifully cover your living expenses.

Seriously.

The moral: Do what you want. Live in joy. The money will follow and you won’t find yourself on someone’s couch wondering where the hell you went wrong. The end.

*I want to say that I’m extremely grateful for every soul that I have ever come into contact with as a result of following a traditional course of study. Some of my closest friends and strongest supporters are in my life because of this. I hope that none of you read this as an expression that I could do without you because that couldn’t be further from the truth. I just wish I hadn’t wasted so much time doing something that I know in my heart of hearts doesn’t fill me with joy – which is hoping to share the “correct” answer in a lecture hall to receive some arbitrary mark of satisfactorily mastering material that some dead, white guys agreed on.

January’s Savings Challenge – Cut It Out

Happy New Year and good day!

I hope that all of you have found 2014 to be welcoming and inviting. As promised, here is the FIRST (of twelve) monthlong savings challenges. Keeping in theme with making resolutions and developing new habits, this savings strategy is appropriately called “Cut It Out”!

As you may have guessed from the name, you’ll have to give up something, anything, once a day or once a week and put the money for that convenience into your savings account.

The Rules:

  1. Find a daily (or weekly) indulgence that you can live without.
  2. Cut it from your daily spending.
  3. At the end of the week, deposit the amount you saved into your designated savings account.

Remember, this is to pad those savings accounts in little ways because I know you’re already automatically depositing a percentage of your pay into your savings (if you aren’t, we’ll just pretend that you were because you’re going to start as soon as you’re finished reading this post). If there is ever a day where you slip up and buy whatever item you’ve agreed to give up, it’s okay. You can always do better tomorrow.

So what are you giving up for the first 31 days of the new year?