Thursday, March 15, 2007

The milk scared me

I just opened a carton of milk and noticed that the expiration date is April 15 -- TAX DAY. Gaaah! It's sneaking up on me! Apparently, pretty much everyone else in the universe doesn't mind tax day, despite ten thousand snarky jokes about it. I have noticed that most people fill their taxes out early so they can get their refund. This would not be us. We generally owe a pile of cash to various state, federal, and local revenue-collecting agencies. The biggest reason is that Laura and I both work a lot of jobs that don't take taxes out. We owe income tax, and we also owe around 15% of our not-yet-taxed income in social security tax.

Another reason we owe a huge chunk of cash is that tax withholding, at least in practice, seems to be oriented around the assumption that you only work one job. Your employer withholds a certain amount of your pay and sends it to the government to pay your taxes. But they base the amount of the withholding on an amount slightly less than you earn (or on a slightly lower tax rate than you'll pay; I don't know which). There's nothing wrong with this; it's all done in accordance with IRS guidelines. This keeps the employer from overpaying too much, and the IRS from owing you too large of a return; they assume, correctly, that you'll get a standard or itemized deduction. But if you work lots of jobs, this works against you; all of your employers do this, and you end up having taxes withheld on an amount significantly less than you actually earned.

Tax time tends to hit us pretty hard. We make okay money, but we're bad about saving it for taxes. That is, if we have some extra cash we're more likely to use it to pay off a high-interest credit card than to save it. Our saving grace is that Laura tends to make pretty good money around tax time. But the trade-off is that she's working a lot; her next day off isn't until April, and when it comes she'll be able to say that it's her third day off in nine weeks. Ouch.

I should mention that Laura does our taxes every year. The general arrangement is that she handles our finances, and I handle the housework (vacuuming, dishes, laundry, kitty boxes, home repairs, etc). I suspect she's better at it than I would be. And I'm a lot more Type A about laundry than she is. It's a good arrangement.

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