Happy Valentine’s Day from the IRS

On Wednesday Jody and I got a surprise letter from the IRS, an early Valentine if you will, stating we owed $2,000 in back taxes from 2006. Isn’t that the sweetest thing?

Apparently we made an error in filing our 2006 taxes and failed to include some stocks Jody received through work. He was under the impression that taxes were already deducted; they were not. It was an honest mistake on our part, but a mistake nonetheless and the IRS has come a-knocking to claim what is theirs – with interest.

The shock of finding out we will need to part with $2,000 by March 15 has put a damper on the love-fest that should accompany Valentine’s day. Thankfully, we have the money to send, but it was earmarked for paying down debt and preschool tuition, and will pretty much wipe out our savings account.

I’m trying to take it all in stride, but it’s hard and I admit I’ve been in a funk most of the day. It messes with our short- (debt) and probably long-term (moving) goals, but I know we will make the money back eventually.

This has made me consider returning to photography, perhaps just for the spring and summer, when it’s optimal to work outside with natural light anyway. We shall see.

For now I’m going to try to forget about it for at least an hour while I go eat a brownie and watch LOST. So there. ;oP

21 thoughts on “Happy Valentine’s Day from the IRS”

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Tim Ramsey

  2. ouch!
    i am not sure what you religious stance is, but i always thinks that God will provide. this is just a bump, and there will be a bountiful blessing down the road for you!
    FWIW, i am self-employed and HATE this time of year when the gov’t takes what they say is their share of taxes from my income…seems to be high than what my DH pays! 😉

  3. Sorry for the bad Valentine. Maybe you can replenish some of your savings with the rebate that was just passed.

    I know what a bummer it is, especially when you have long term plans and stuff like this happens that messes with them.

    Now that we finally have a light at the end of the tunnel, I can say that you will earn/save the money back. The last year has taught me really how to save more and question everything I buy-it is amazing how all those little extra things add up.

    Hope things look better tomorrow.

  4. Oh I hate when that happens. The only good way to look at is that at least the bill arrived at a time when you had the cash to pay it! Hope the rest of your Valentine’s Day was a little rosier 🙂

  5. Oh crumbs!

    I’m sorry, I think it should be the 14th of Feb that is the leap year day myself and I’m happily married!

    Congrats on making plans, I did that and my husband didn’t even notice until we went to buy a house.

  6. Yuck! We had a series of letters throughout 2004-05 re: my husband’s 2003 taxes. When the IRS started writing “feel” our accountant tartly responded: We don’t care how you “feel.” The Code/Regs say XXX. The IRS caved! We would have owed them closer to $6K for 2003 and around 10K for 2004! We HAD to win. Anyway, I’m sorry the IRS isn’t a better Valentine!

  7. Amy, that is just no fun! However, make sure that it is the right amount that they are asking you to pay. They do not take into account your basis in the stock when they calculate the amount owed! Make sure and redo the forms yourself… maybe that will decrease the payment some. (as shocking as it may be, I am also a CPA)

  8. eeek, thats a real downer. Everytime we think we’re going to be ahead at tax time, it goes the opposite way… usually due to car repairs or other unexpected major expenses. Hope everything works out for you guys. Maybe you will still get the rebate thing they are talking about for later in the year?

  9. OUCH!!

    Often the IRS is willing to negotiate though. When one of my GFIL’s died he owed a ton of money to the IRS and my FIL called and made an offer, which they accepted. You might try calling and saying that you don’t have $2000 right now but could pay X amount in cash right now and see what they say. The worst that happens is they say no and you’re still out $2000.

    I hate these kinds of surprises!

  10. I feel your pain. Until last year, hubby and I were technically self employed…and the self employment killed us. We’re still paying on the outstanding debt from 2005. Ugh.

  11. Oh my gosh! We received a very similar Valentine also! The IRS told us we needed to send $1,159 for 2006! For very similar reasons! What an unfortunate coincidence. Our Valentine had to be returned by March 8. Parting with that kind of money is not sweet at all.

  12. What a crummy Valentine’s present! Hopefully the rebate this summer will help ease the hole in the savings account. The hubby just came downstairs and told me what our tax bill is for this year…I’m drinking a beer and having a wake for our savings account as well. 😉

  13. Man, that totally sucks. I think it was 2006 for us that we had to pay 5k on taxes for 2005! It was our mistake – hubby made an error on his W-4 – but it still hurt.

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