Taxes, Emergency funds, and Losing My Sh**

 

tax forms

My Blog, My Rules

I have very few rules relating to my blog. Basically be respectful and no comments about religion and politics because I believe everyone has a right to their own beliefs and decisions regarding those hot topics.  Different strokes for different folks and all that stuff…

That being said, I nearly lost my sh** last week after working on my taxes. As a single parent of two college-aged boys, I’ve always gotten a very decent tax refund. I know, I know, there are people that say you shouldn’t give the government a tax-free loan. I agree with their reasoning but I know myself and I will fritter away the “extra money” in my paycheck so I set this up as a form of forced savings for the beginning of the year. This money is ear-marked for my life insurance premium due in April and car tags in March. The rest is generally divided up for house/car repairs needed, and hopefully some left over for an emergency fund deposit, debt pay-down, and a small road trip/fun money.

2018 Tax Reform=A Bad Start to 2019

My tax situation is very similar this year from last year’s. I certainly did not see any noticeable increase in my paycheck due to this wonderful tax reform. Last year I got a little over $2000 back. I’d heard all the grumblings from people about the radically smaller refunds they were getting or owing money so I had already told myself that my lengthy list of repairs/to-do list was probably going to have to be cut. I resigned myself to the thought of my refund being halved this year and vowed to do my taxes early so I could re-align my project hit list with the smaller anticipated refund.

Saturday was my day off so I sat down, knocked out the boys taxes, and thought I’d at least start mine. I bet you’re all jealous thinking about how fabulous my Saturday night plans are… Initially it showed I OWED almost a thousand dollars. My week was spent alternating between pouting, hyperventilating, ranting against the 2018 Tax Reform, and scouring my tight budget to see how I could come up with a thousand dollars in two months. Today I sat down and carefully went through the return one more time, desperately looking for anything that might lower my bill by even a little. Thankfully I found an error and I’m now getting a refund again. Not as much as last year but considering the panic I’d lived through all week, I’ll take it.

Plan of Attack

So this was obviously insanely stressful. Bad words were uttered…loudly and frequently as I kept plugging in my numbers and Turbo Tax kept giving me a larger and larger red number. (Red numbers are always bad in accounting). The majority of the week my mind was racing as I struggled with how to come up with such a large sum in such a relatively short time frame.

I preach all the time about having an emergency fund. Guess what?? This constituted an emergency. Unfortunately, I made some questionable choices on using some of that emergency fund last year so it’s not as full as I am normally comfortable with. My plan was to take about half the bill from my emergency fund and then work diligently to replace those funds as quickly as possible afterwards.

Where was the rest of the money coming from? I was going to tweak my budget for some extra savings the next two months by cutting back on my grocery, gas, and entertainment categories. I have some cash back funds I’d been saving up from a credit card that I would have used. A few survey sites owed me money and I could cash those in as well. Last but not least, I was going to try to pick up a couple extra shifts on my part-time job.

Final Thoughts

I can’t even begin to stress the importance of having an emergency fund. Obviously I’m super relieved that I don’t have to dip into mine but it was there if I needed to access it. My next post will probably be totally devoted to this topic. So I’m curious how many of you have worked on your taxes this year? Were you disappointed with your results? Do you have an emergency fund to cover unexpected surprises?

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