by Tricia
I was concerned whether my health insurance would cover my visit to the doctor for my miscarriage. Since my policy does not cover prenatal care, I wasn’t sure what to think. Would they consider the miscarriage something that was prenatal? I tried asking the hospital when I would get the bill (because I am very anxious to know), but they couldn’t give me an answer. They told me to wait for the mail.
Well, I received an email from my health insurance stating that I have an explanation of benefits available to view. I logged in so fast to find out. The explanation was only for some lab work that was done (the ultrasound and a tissue culture) but they covered it. In fact, I only have to pay $22.50 for those things. That was very good news. Now, it’s a matter of waiting for the doctor visit, my RHOGAM shot and my blood work.
I finished our federal taxes and we will owe a little more than $800. Ouch. This morning I initiated a transfer from our savings account to cover the payment. As for the state taxes, I haven’t finished it yet but it appears we will owe about $60. I know some people think that it’s better to pay less into taxes and having to owe than to have a refund. I’d much rather not have to scrounge up the money to pay for taxes that we owe. Taking from our savings account hurts. If you look to the right, our savings is only a little over $1,000 since I had to withdraw $1,000.
I’ve been dragging my feet on completing the other thing that will add to our debt. I have to revise our 2005 taxes due to a costly error. I could play the audit game, but I don’t want to go there. It’s already a year of interest we owe and I don’t want to owe any more. For this payment, we do not have enough money in our savings to cover that and we will likely have to enter a payment plan with the IRS or I may decide to use a credit card check to pay the bill. I’m not sure what to do yet. Having debt with the IRS scares me because they have the power to seize accounts. If something bad should happen, I would rather owe money that we can’t pay to the credit cards.
Savings going down…debt going up. Not good, but there isn’t much I can do about it but face it and get over with it and move on.
I am surprised that you ended up owing money, since you have low incomes and a child. Most people that end up owing make a lot more than you do, and don’t have kids.
I have one of the same health insurance plans you do. It didn’t cover maternity, only complications. Miscarriage is considered a complication. The out of pocket cost for us wasn’t so bad, because I went to a Catholic hospital which is charitable and works with people. They charged me a low amount as a package, and I paid my obgyn, hospital and anesthesia when I was only 2 months (well, we had savings). We’ve replentished the savings since then.
Remember that if you get pregnant again- Catholic hospital.
I am not a financial planner, but it certainly *seems* like a bad idea to pay the additional ’05 IRS bill on your credit card rather than to enter into a payment agreement with the IRS. Won’t it cost you more to pay the credit card interest? Do you have a friend on another one of the financial blogs, perhaps, who could advise you?
I’m glad that it covered it! When I had “just in case” insurance when my husband was employed part time and I could not find a job to save my life, I was worried all the time! It did not cover birth control or pregnancy related expenses. It drove me nuts- like, you can’t have it both ways, you know? I know that many people on the frugal blogsphere are anti Planned Parenthood, but they really saved my butt during those early uninsured poor days.
I was like you too- I had too much in savings (not much, but too much, apparently) to qualify for any government assistance- insurance, food stamps, anything. I don’t think people realize just how poor you have to be to get those things!
danielle – unfortunately, we have only two choices for hospitals and neither are catholic. While I save a lot of money living where I do, I sometimes do pay a premium due to lack of available choices. Thanks for your info, though. It may help someone 🙂
Elizabeth – no, it may not be the best thing to do and I’m still thinking about it. I know the IRS will charge interest on the unpaid balance. I’m not sure what that rate is. Once I know exact numbers I’ll have to make the decision. If I can get the interest rate lower on a credit card then I may go that route. Good idea about asking other bloggers. I think I may post about this in the MBN Forums (it’s where a lot of the finance bloggers get together and chat about things).
Great site! I’ve been a CPA for about 13 or so years and thought I might try and give a little advice on your issue with the 05 taxes. It’s just my 2 cents but – I would suggest that you go ahead and set up a payment plan with the IRS. This is actually a very simple process and usually accepted without any hesitation.
I agree that it is a good idea to just bite the bullet and amend the return rather than sit around for 2-3 years worrying about whether you are going to get nailed for the error. But, you will pay less interest with the IRS than you would with most credit card companies and, to be perfectly honest, they are nicer to deal with than most credit card people when it comes to missing a payment by a couple of days.
Yes the IRS can take your stuff – but that is rare and wayyyy down the road after many notices and threats.
You can simply offer the IRS a downpayment and then a monthly payment due on whatever day of the month is best for you. Hope that helps. My wife tuned me into your site and I’ve really enjoyed it. God Bless You and Your Family!
My experience with a payment plan with the IRS still haunts us to this day. We entered into a payment plan with them in ’94, which they accepted, and then they filed a lien against us which to this day still shows as a derogatory public record on our credit report. We paid it off in ’98, which should have fallen off our report in ’05. We’re working on getting it removed. I’m new to you site and enjoy it very much. My best to you and your family.
About paying taxes versus getting a refund:
Ideally you want your taxes to be a wash, where you owe close to nothing, and you get back close to nothing. Paying $800 in federal taxes is too high to be ideal, especially on your income. But, if you can adjust your witholding so you end up paying only $100 or so, then I think it would be worth it. Or even getting a modest refund wouldbe fine, again $100 or so. Also, if you end up netting a small refund amount or a small payment between your state and fed, that would be fine, too.
However, this might be difficult for you to figure out if your income is going to be variable. I’m assuming that you file jointly, or if you file individiually you’re combining the total you and your husband owe. In which case you might want to do research on the web on how to finesse the witholding. Ideally you would get advice from a CPA who has experience doing tax returns, especially returns like yours. (Not all of them do, necessarily – like any profession there are specialties.) But that would cost money; how much I do not know.
Oh – Here’s an idea – maybe you could get free, quality, professional advice? The Boston Globe has a column called the Money Makeover. People apply for one by giving their story and situation. They then meet with a fee-only financial planner who gives an assessment of their situation and advice. The catch, though, is you have to be willing to have your details published in the newspaper. Maybe there’s a regional paper in your area that does something similar?
I feel your pain about the taxes. Last year I did my taxes and realized I owed around $1000. But they sent me a refund saying that I had marked down that I was a defendant (which I totally don’t remember doing!). I have never fixed my taxes. So I’m going on Friday to get this year’s taxes done and I’m hoping they can help me fix last year’s.
How awful for you. To have to go through something so traumatic as a miscarriage and then have to worry about paying for the medical bills related to it.
It makes me realise how lucky we are up here in Canada.
Back again with a link to an IRS withholding calculator. You’ll need you last pay stub and your return for 2006 since you have to enter salary, charitable contributions, itemized deductions, etc. It spits out a recommended number of allowances to claim that will cover your taxes while minimizing your refund.
http://www.irs.gov/individuals/article/0,,id=96196,00.html