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Taxes, Taxes, Taxes!


2018 was a great year for my husband’s business. We landed some large jobs and it was a banner year. We paid some taxes throughout 2018 but it wasn’t enough, and we were hit with a more than $5,000 tax bill early last year. If you’ve ever been hit by a significant tax bill, you know those are followed by quarterly estimated payments to proactively pay for the following year. Your scrambling to come up with enough cash to pay the tax man then scrambling every quarter for the next year.

Entrepreneurship is awesome, until tax time.

2019 was not a good year for my husband’s company. We started turning away business midway through the year in preparation for moving it to light part-time work on weekends. Yet, each quarter, we wrote pre-payment checks to the IRS.

I hoped for a nice refund this year after all those estimated payments we made throughout 2019 but if you’ve lived in California longer than a minute, you know the taxes here are insane. There were years I would get a nice refund on the federal side and still must pay the great state of California.

We met with our tax guy last week. I think the poor guy sees me coming a mile away… or he sees the raincloud I’ve been carrying since last year.

My raincloud is quite huge at this point.

We sat through the hour and a half appointment. I was literally shaking. My husband’s truck decided to take a turn for the worse and the mechanic still had it two days later. The day before, my dentist discovered a problem with my crown and it needed replacement ASAP. And next Saturday is the registration for summer camp for the kids. We completely forgot to budget for it. A huge tax bill, a huge car repair bill, and a huge dental bill would hit my emergency fund hard. Forget summer camp. Kids aren’t going this year.

After a final few clicks, he looked at me and smiled. ‘Ready?’ he asked.

‘Hit me with it.’ I said unsmiling.

‘Your REFUND this year will be $6,000. Yes, it’s a refund.’ he laughed.

Oh. Thank. The. Lord.

Between the truck repair, estimated dental bill, and summer camp for the kids, we’ll have about $4,000 left. We’re keeping it as a buffer fund for now so we can continue to keep our hands off the emergency fund. We’ve discovered that things hit harder when we are living on a single income. When we both worked, we could respond better to unexpected expenses. Now that our budget is smaller, we need to work much harder to stay in bounds. We were good before, but we’ve had to turn into magicians the last few months. Like anything new, we just need time to adjust.

California didn’t win this year!! Hoping tax time has been kind to you as well!


  • Reply Ann |

    So happy to hear it worked out for you ! Great writing, btw. I was expecting a bad tax bill for you! 🙂

    But I would like to change the tenor of everyone’s discussions of taxes. It does seem hard to pay them…OTOH I like driving on roads, and I like having police officers when needed and judges and city planners and public schools and public universities and any number of things that are taxes pay for. I don’t always agree with all the ways my tax money is spent, but overall we ALL use services provided by the government. So maybe we could not talk as if we would be happier if we didn’t pay any taxes.

    Wonderful that you can put away $4000 of that money — and your kids get to go to camp! Woo hoo!

  • Reply Kili |

    Hi Beks,

    How does your family have a single income? I thought you were the breadwinner? But your husband has a business as well? Or used to have?
    Maybe you can help me understand a little better – feel free to link to a previous post in case I missed something .

    • Reply Beks |

      We were both working last year. After we paid off debt, saved an emergency fund, and did repairs to the house we’d been putting off for years, he closed his business and we survive off my income. He still does small jobs here and there but not much. It’s tight but having a stay at home parent was important to us.

  • Reply Joe |

    My comment not directed at Beks specifically, but her example is a convenient one to use. I think that taxes are a great point of financial illiteracy in this country. Yes, they can get complicated, but for the vast majority of folks they are not. Of course, many people with debt got there in part because of some degree of financial illiteracy (e.g. not understanding interest rates or how minimum payments work), so taxes must seem like a similarly insurmountable mountain.

    Second, this further illustrates the need to have additional layers of surplus funds (as discussed in Beks’ trailer post) to take the stress out of these situations.

    I would argue that a huge component of financial stress comes from uncertainty. You can eliminate that from either approach (understanding the numbers, or building up additional funds) but ideally both!

So, what do you think ?