In other words, I did pretty well in 2010 so I had to pay extra money to the government for doing so well. To put it simply, free tax filing sounds good right about now. 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!

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!

For example, aside from throwing out a lot of garbage that was accumulating in the car, I was able to take some t-shirts that I had been piling up in the trunk. The t-shirts were piling up there because I honestly had no where else to put them! Anyway, as I write this post the t-shirts are all out of the dryer after having been washed earlier today. Some of them are on the “charity” pile and some other ones are on the “keep these” pile. By the way, the “charity” pile of clothes is getting bigger and bigger!

Professionally, I’ve advanced nearly every deal that I’m working on which is definitely a function of the fact that this week is spring break for my undergraduate students and thus they aren’t around for me to have to teach.

I’ve been moving a bunch of my online projects forward, which I’m always happy about. As a part of this process, I’ve been able to detach some folks from Usable Web Solutions, LLC (i.e. let them know that they need to find a new “web guy”) and I’ve been able to send payment letters to other clients.

On a more personal level, I ran out of one of my prescriptions the other day and I managed to get it refilled (even though there were no more refills left) through the services offered by my pharmacy. This was a much easier process than I imagined it would be and I’m extremely happy that this worked out so easily. You know how much of a pain in the ass it can be to work around the pharmacy and the doctor’s office beating each other up… No thank you.

Oh, and after my car had the windshield replaced earlier today, I took it over to the inspection station and it passed inspection. So… I won’t be going back there for at least two more years, thankfully!

I also spent some time today doing some short-term (two month) financial planning to address some upcoming expenses that I have to deal with. Among these expenses are paying for the windshield replacement, paying for a flight to Nashville in April, and paying for my 2010 membership to the local CSA farm. By my calculations, I’ll be able to continue my $1,000+ biweekly payments on my one student loan and pay for all of these other items in full by April 15th.

And speaking of April 15th, I spent a few minutes today finalizing my taxes so I think that they’re ready to finally send into the IRS. I should be getting a decent return back this year, although still below what H&R Block suggests are the averages for people of my age and income level (not fair!).

As you can see, I’ve been pretty busy. However, before this coming Monday hits, I have to complete a grant application for a client that I’m working with on the side; begin, write, edit, and finalize a 10 page paper and presentation package for the class that I’m taking; prepare lesson plans for my class for the coming week; go to Pennsylvania for a wake this weekend; and review some material for the foundation where I serve as a Trustee.

All in a weekend’s work!

The biggest pain in the ass in the next few days will be going to the doctor this Friday. The doctor is going to be upset with me because I was supposed to lose ten pounds since the last time I saw him (early November 2009) and, instead, I think that I’ll either break even or maybe gain 3 – 5 pounds. Not good. However, I don’t have too much time to worry about that until after next Monday – which is good since that’s probably when my blood test results will be coming in.

Lots to do in the next few days. Don’t be surprised if I miss a day here and there updating the blog. Thanks!