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Posts Tagged ‘Taxation’
Another Thousand Knocked Off My Student Loan Debt – Down to $28 Thousand
April 14th, 2012 | Added to Random Entries | No Comments »
And… we’re back! Or I should say that “I’m back,” but whatever. After a little over a month and a half I’m glad to be back with another student loan reduction update. This time around, I’m glad to report that my student loan has dropped from $29 thousand to $28 thousand which, all things considered, isn’t so bad. Sure, I would have rather taken that $5 thousand down payment that I put on my new truck and that nearly $4 thousand that I just paid to the government and use it to reduce my student loan balance so I could happily report right now that my student loan debt broke beneath the $20 thousand barrier all the way down to $19 thousand, but what can you do, right?
 Down to $28 thousand However, like I’ve written on here in the past – I’m not annoyed that I had to spend all of that money on buying a new car and paying my taxes because the new car means that I’m finally riding around in a comfortable, safe vehicle and having to pay taxes means that I’m making more money overall. And no one can really be too upset when they’re safer, more comfortable, and making more money.
I do think that I’m in a somewhat “lost” category of taxpayers when it comes to my required payment, though. You see, I took out a ton of student loans to go to college, graduate school, and pay for living expenses. Well, in all of its wisdom the government created a student loan interest tax deduction so that if a taxpayer paid a bunch of money in student loan interest, then they could at least reduce the total amount of their taxable income to reflect the economic impact of having to pay that interest. In some ways, it’s very similar to the home mortgage interest tax deduction.
What’s interesting about my situation is that yes – I did earn a few more bucks in 2011 and thus had to pay more in taxes. Sure, no denying it at all and I’m not looking to deny it. However, unlike other folks who earned more money last year, I didn’t sock that money away into some account or invest it in the market. Nope. Instead, I gave all of that excess income to the government to pay down my student loans!
Do you get the ridiculous paradox that I’m caught in here?
I earned more money, gave that money to the government to pay down my student loans, but because I earned more money in the first place, the government wants more of my money in taxes (and that “more of my money” doesn’t exist… because I already gave it the government!). Do you see the absolutely outlandish situation that I’m caught in here?!
Anyway, since this is the only thing that has been on the student loan section of my mind for the last few weeks I thought I would share with you good people. And there you have it. I gave the government all of my excess income last year and – simply because I earned excess income and gave it to the government – the government has now come back and demanded even more of my money by this Tuesday. Unbelievable.
In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $92 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $28 thousand in principal to the United States Department of Education’s Direct Loans program. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.
Tax Year 2011: The Tax Man Cometh… And He Wants To Get Paid!
February 22nd, 2012 | Added to Money, Jobs, & Finances | No Comments »
It was right about this time last year when I posted an entry on this blog discussing how I owed more in taxes for fiscal year 2010 than I already paid. Don’t get me wrong, I pay taxes just like every other working person via the payroll tax, income tax, sales tax, etc. However, last year was the first time where I actually owed more money to the government because of earning money from jobs outside of my primary employment.
In other words, I did pretty well in 2010 so I had to pay extra money to the government for doing so well. In total, I paid $3,564 to the Internal Revenue Service and another $374 to the great State of New Jersey.
 "You can pay me now or you will pay me later." - Irwin R. Schyster Oh, you might remember that I used a picture of former WWE wrestler Irwin R. Schyster in last year’s post. Well, I thought that the picture worked pretty well and was entertaining, so considering that I just uploaded a post that talked about WWE bringing WrestleMania to New Jersey, I figured that it would be great to bring back Mr. Schyster for this year’s tax news. And speaking of this year’s tax news…
I owe both the Internal Revenue Service and the State of New Jersey taxes again for 2011.
You can go back and read last year’s entry to find out all of the different places where I draw income from (including advertising revenues related to this blog). You can also go back and read last year’s entry to find out some of the different side jobs that I perform each year (adjunct teaching, for example). However, I want to reiterate a point that I made last year: generally speaking, I want to pay these taxes.
There are a lot of people who spend a lot of time trying to find ways to not pay the government according to the tax laws on the books. Unless you’ve got big-time scratch (and I do not), then it makes no sense to go out of your way to hide income or gains from the government. They’ll find out and they’ll nail you for it – so pay your damn taxes. The reason why I’m generally okay with paying these extra taxes is because I made a good amount of money last year.
I mean it’s simple enough, right? You make more money than you pay taxes on so you have to pay taxes on that excess income. Generally speaking, what’s the problem with that? Sure, we can get into a discussion about whether or not I should be taxed at the rate that I’m currently taxed at (I would suggest that I should be taxed at a lower rate). And yes, we can get into a discussion about whether the government uses my tax dollars according to my will or in a manner that I find efficient (the answer is “no” for both of those items), but that’s not the point of this entry. The point is that you should all want to pay more in taxes because if you have to pay more in taxes, then you must have earned more in income during the previous year. Let me repeat that:
The more taxes you pay, the more money you earned.
Keywords: “more,” “money,” and “earned.”
While I think that it sucks and I might be annoyed that I have to send a check to the Internal Revenue Service for some $3,200+ and to the State of New Jersey for some $450+, I’m glad that I worked hard enough and earned enough money to increase my tax liability. Although I do have a bone to pick with the IRS over one aspect of my taxes (the student loan interest deduction), but I’ll get to that in an entry to be posted in the next few days). Also, this year I was better prepared for a higher tax liability because of being so shocked that I owed money last year. So I’m prepared to pay the government this year with very little impact on my regular cash flow.
And that’s a good thing… because nobody wants to open their door and find Irwin R. Schyster waiting on their doorstep looking for a check. No thanks!
A Great Graphic on Poverty Levels in the United States of America
July 27th, 2011 | Added to United States Politics | No Comments »
After I posted the information-packed graphic which talked about education statistics the other day, I thought that I might put some more of these graphics up on the website since they are both interesting and contain great information. When I was in graduate school, I learned a lot about poverty and, specifically, the policies that impact impoverished citizens in our country. Of course, I was sitting in a classroom where far-left professors tried to indoctrinate me to believe in their point of view versus believing in, you know, facts on the ground – but we all have issues that we need to overcome in our education!
Hopefully, you find the information below educational. Enjoy!
Personally, I find the ethnic breakdown and the geographic breakdown the most interesting on this chart. Something to keep an eye on as this debt ceiling debate rages on in Washington, DC…
These Debt Drops Are Good, But They Should Have Been Greater…
April 16th, 2011 | Added to Money, Jobs, & Finances, Student Loans | No Comments »
Last month, I wrote about dropping my student loan debt from $53 thousand to $52 thousand and then this past week I wrote about dropping from $52 thousand to $51 thousand. And while those drops are good and bring me ever closer to breaking through that $50 thousand barrier, they should have been much greater. Unfortunately, my success in 2010 ultimately resulted in an inability to make greater student loan payments today.
And it’s simple, really – in fact, I already wrote about it on this blog. You’ll remember at the end of February when I wrote about the fact that I’m going to owe taxes this April 15th. Hey, it is what it is, you know? And while I’ve been able to reduce my total taxes owed by about two hundred bucks (I forgot that last year I opted to not receive a portion of my state refund because I figured that this was coming), I still owe a lot of money in taxes this year.
A few weeks ago I received a really nice check for teaching at the all-online college. It was the type of check that if I didn’t have this level of student loan debt, I would probably take half of it and put it away in a savings account and then use the other half to update my wardrobe and spend a weekend away on vacation somewhere. However, I have student loan debt so whenever I come into a financial windfall the first thing that goes through my mind is, “Oh wow! I can pay down a lot of student loan debt with this money!”
Some might consider that pathetic, but when you’re stifled with student loan debt you just want to get rid of it as soon as possible.
However, when I received that nice check for the online teaching, I couldn’t even be excited about it. Why? Well, I received that check and immediately knew that all of it would be wasted on the government because I owed just about as much as that check was worth in taxes this year. Let me tell you – that’s a shitty feeling. It’s a shitty feeling knowing that these several thousand dollars that I really should be using to pay down this student loan debt is going to, instead, be wasted on bullshit government programs or inconsiderate assholes who are milking the system (and don’t cry me a river about all of the people who need the government subsidies because I see the assholes who milk the system on a daily basis in the Neptune/Asbury Park/Eatontown area of Monmouth County).
It sucks.
So while these debt reductions have been good and I’m proud of reducing my student loan debt, I should be paying down even more than I can write about here. Unfortunately, the government has managed to get in the way.
And it really sucks.
Tax Year 2010: Time To Pay The Tax Man…
February 28th, 2011 | Added to Money, Jobs, & Finances | 4 Comments »
Last night I spent about four hours putting together my tax forms for 2010. I use the Deluxe version of H&R Block at Home (which, by the way, I downloaded this year instead of buying the disc – no complaints from me about the downloading process). And even after using H&R Block’s software, spending those four hours pouring over different tax forms, and giving my taxes an incredible number of reviews it appears that 2010 is the first year since I’ve been filing returns where I’m actually going to have to make a tax payment. Well, I’ll have to make two payments – one to the State of New Jersey and one to the Internal Revenue Service.
 Alright, so WWE alumnus Irwin R. Schyster isn't actually getting my money, but you get the point! According to the tax software, I owe the great State of New Jersey $525 while I owe the IRS some $3,686. In total, I owe $4,211 in additional taxes for last year. Sure, I have a few more reviews to make on the various tax forms (my taxes are really complicated – see the next paragraph), but I don’t think that these numbers are changing too much.
The reason why my taxes are increasingly complicated is because of all of the stuff that I “do.” In fact, if you’ve been reading this blog for a while then you know that I bitch every once in a while about being too busy. Well, that hectic schedule carries over a similar craziness when it comes time to do my taxes. You see, I get some W-2 forms (my day job and teaching at the local college), a bunch of 1099-MISC forms (teaching at the online college, a few for certain types of income earned from Usable Web Solutions, etc), a 1098-T form for the classes that I was able to take for free last year at the local college, two different student loan interest deduction forms (one from the USDOE and one from NJHESAA), a Schedule C for my website company, a Schedule C for the other small business that I started for the online teaching and grant writing, a 1099-B for proceeds from stock sales, etc, etc. It gets ridiculous after a while.
If I didn’t have such a good handle on all of this stuff (I think), then I’d seriously consider getting myself an accountant to do this work for me. But I think I have a good grasp on what’s going on with my funds, so I’m confident in this return. But to get back to the point…
I already pay my taxes. Just like the rest of the working world, my company deducts my tax obligation through my paycheck and – just like the rest of the working world – I get sick at how much money gets taken out of my paycheck for taxes each pay period. However, I’m fine with paying an additional $4,211 in taxes for last year. Why? It’s simple, really.
I made a good amount of money last year.
Look, folks – I’m not writing this entry to brag or toot my own horn or anything because I’m not bringing in the big bucks by any means. However, think about what you’ve read on this blog for the last year or two: I work at a day job, I’m an Adjunct Professor at the local college, I’m an online instructor at a very well-known online college, I’ve owned a successful and profitable small business for 5 years, and I contract for some low-level consulting and grant writing jobs for local nonprofit organizations. I work like a madman! And, obviously, one of the end results of that type of work schedule should be an increase in a guy’s annual income and, thankfully, that’s how it worked out for me last year.
I WANT To Pay These Taxes
But the reason why I wanted to share the fact that I’m paying a lot of taxes for last year’s income is because I want to pay these taxes. That’s right – I want this additional tax liability which is over and above the taxes that I already paid last year. Why do I want this increased liability? Because when you pay more in taxes, it means that you’re making more money and everyone should want to increase their annual income. Of course, most folks won’t have a convoluted tax return like I have where certain revenue streams deduct federal income taxes and others don’t, but just remember the lesson here: the more money you make, the more money you’re going to owe.
It’s okay to owe a few tax dollars at the end of the year – it means that your income is going in the right direction. Good luck on your tax returns this year, everyone!
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