My New Windfall

Tax season is over.

money

money (Photo credit: 401(K) 2013)

This year, TurboTax and Amazon teamed up to offer me a 10% on up to $1200 of my refund if I took it as an Amazon gift card.

$120 free if I spend that money with a company I’m going to spend money with anyway?

Yes, please.

I spend lots of money with Amazon.  I subscribe to many of my household items there, because I use them and I don’t want to have to think about buying them.  I get my soap, shampoo, toilet paper, paper towels, and garbage bags automatically delivered.  There’s a bunch of other stuff, too, but that’s what I remember off the top of my head.  If I have 5 items in a monthly delivery, I get 20% off.

Free money, free shipping, and none of the hassles of shopping?

Yes, please.

So now I have a $1320 credit with the company I use for most of my non-grocery shopping.

I also have 962 items on my wishlist with Amazon.

To recap: $1320 burning a hole in my metaphorical pocket and 962 items that I have wanted at some time in the past, begging me to bring them home.

That’s a dilemma.

The smart answer is, of course, to let that money hide in Amazon’s system and slowly drain out to pay for the things I actually need.

The fun answer is to stock up on games and books and toys and gadgets and cameras and, and, and….

Some days, it’s hard being a responsible adult.

I think I’m going to compromise with myself.  I’ll leave the vast majority of the money where it is, but I’ll spend a little bit of it on fun stuff, and a little bit more on stuff I don’t quite need, but would be useful, but not so useful that I’ve already bought it.

A new alarm clock to replace the one next to my bed that automatically adjusts for daylight savings time but was purchased before they changed the day daylight savings time hit so I have to adjust the time 4 times per year instead of never.  That’s on the list of not-quite-needs.

The volume 2 book of paracord knots is on the list of wants that can’t possibly be considered a need, but it’s going to come home, anyway.

I figure, if I spend a couple of hundred dollars on things I really, really want, I’ll scratch that itch and leave most of the money alone.

What would you do with a $1300 gift card at a store you shop at every week that sells every conceivable thing?  Spend it right away, or stretch it out, or something else?

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Taxes

It’s almost time to pay Uncle Sam for the privilege of living in the US.

Tax

Tax (Photo credit: Images_of_Money)

Since my business partner and I just finished our corporate taxes last week, I thought it would be a good time to finish my personal taxes.   I’ve got a relatively complicated tax situation.   I’ve got personal taxes, my side-hustle taxes, and our side-hustle taxes.   I had my side hustle taxes done and my personal taxes were just waiting for the final numbers from our corporate filing.   We’re an LLC, run as a partnership, filing as an S-Corp.

I was all set to get about $100 back from my personal and side-hustle #1 taxes.  That’s a perfect tax year.   No more money out-of-pocket and no free large loans to the government.

Side-hustle #2 ruined that.   It started taking off in September, so we’d never paid any estimated taxes.   When I added those numbers in, I owed a bit under $2000.

Ick.  I hate owing.

Thankfully, I set aside 25% of all of my side-hustle income just to cover this.

It was still too much.   What could I do to lower my tax bill?

My IRA!

I’d only contributed $100 to my traditional IRA last year.   Contributions are tax deductible and you can make them until April 15th of the following year.

That’s great.  I had money sitting in a savings account, earmarked to get wasted by the government, and I had an unused tax deduction that I could still contribute to.

That got it down to a $1000 tax liability.

Was there more?  What could I do?

When I paid off my car last year, I started sending half of my car payment to an account earmarked for the next car.   I had $1700 sitting there, so I sent $1200 of it to my IRA, leaving $500 to hopefully cover any car repairs that come up.    Hope isn’t a good financial strategy, but I’ve also got a straight brokerage account that’d doing pretty well, so I can cash that out, if necessary.

Down to $800.

Contributing a bit over $3000 to my retirement saved me more than $1000 right now.   That’s sweet, but I still owed money.

Did I miss something on my first side hustle?

$67 to oDesk?  How did I manage to keep my annual oDesk bill down to $67?   I had a full-time guy in the Philippines for a while last year, and I regularly hire writers for my niche sites.

So I hit oDesk and ran some reports.   I was off in that deduction.   By $2400.  I have no idea where that $67 came from.   Including it dropped my side-hustle profit considerably, and brought my total tax bill to a net $7 refund.

There is a reason I never file my taxes as soon as I finish with Turbo Tax.  I always wait a week or two, and I always come up with something I missed.   This time, the wait saved me nearly $2000.

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