Confessions of a Laid-off Lawyer

Just Your Average Joe Blogging Away His Debt—In One Year or Less

Tax Day Approacheth

with 18 comments

Total Black: $791.84
Total Red: $229,268.63

Tax day is just two days off.  I still have to get mine prepared.  I certainly didn’t have a lot of income for 2009 since I spent eight months of it on unemployment benefits.  Still, I’ve waited this long because I’m nervous that I’ll once again owe taxes this year.  Not that waiting will change anything.

Actually I did meet last week with a tax attorney here in Manhattan.  But it was a waste of time.  They request a $4,500-retainer fee upfront before they will take on your matter.  And I’m sure they’d find enough to do so they drew down all of your retainer.  Looks like it’s H&R Block again this year.

I figure that at most I’ll end up in the 25% tax bracket for 2009.  I couldn’t have earned more than $82,000 last year.  And since I owe taxes to the IRS, I made sure I had income tax taken out from my unemployment benefits—at least as a sign of good faith.  Not sure that will matter much though.  And how that doesn’t count as double-taxation I don’t know?  The employer pays the unemployment “tax” to begin with.  The employee doesn’t.  I suppose that’s why we have to pay tax on it; it is “income” we’ve not yet earned.  But I digress.

I recall the first Republican moment I ever had: when I looked at the paystub from my first law firm position as a summer associate back in 2005.  I probably even said aloud: “they took out how much?”  I’m no staunch conservative.  But I’m also not really a bleeding-heart liberal.  I acknowledge that the government must collect income to pay for various functions and services it provides.  Judges need salaries, as do their clerks, secretaries, court reporters, and so on.  Police departments need equipment.  The Library of Congress needs to buy books.  People who rail against government spending don’t really parse details too often.

But that said, I do find income taxation unnecessarily burdensome.  Not that I want to turn this into a pro- versus anti-government spending post.  Nearly every night when I return home, I dread opening the mailbox for fear of finding a Notice of Intent to Lien.  At least my meeting with the tax attorney informed me that that notice means very little.  It’s just a warning—an attempt to frighten you into paying up.  When it comes from the federal government, that is.  Not, in my case, New York state.  I received one of those if-you-don’t-pay-we’ll-take-action letters and then a notice that I’d been liened on.  No notice of intent to lien.

Hopefully, as observed in Overactive Imagination, my tax situation won’t be nearly as bad as I imagine.  2007 taxes owed is only just over $1,200—as noted in my days of accounting.  The problem, though, is that every bill I have is just a little over some small amount.  It’s like death by a thousand paper cuts.

Total red is down a bit.  I sent $500 to the closed credit card.  That is next in my sights.  I’d send the rest of what I have on hand but I need to pay for H&R Block.  Last year it cost nearly $500 to have them prepare my taxes because they charge by the form.  Crazy, eh?

Written by Laid-off Lawyer

April 13, 2010 at 23:01

18 Responses

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  1. Why can’t you do the taxes yourself? You have no assets and no dependents. I’m assuming you don’t have outrageous medical or business expenses to write off. Nor do you seem to have complex investment income (capital gains/losses). Why not give it a try? TurboTax has a free federal tax version that you can download. If you don’t want to efile, just print and mail. That’s alot of money for a single taxpayer with wage-only income.

    Donnelly

    April 14, 2010 at 14:25

  2. True. The funny thing is that I volunteered during law school to help staff the VITA (volunteer income tax assistance) program, an IRS-sponsored program where law students prepared taxes for low income families.

    Yeah. Maybe I’ll take a stab at it tonight.

    Laid-off Lawyer

    April 14, 2010 at 15:13

  3. Try Turbotax. There’s a free version and a 39.99 version (any many others that are more expensive.)

    I was able to do my taxes in an evening with it. Lot better than paying $500.

    Anon

    April 14, 2010 at 16:08

  4. Have you accepted tbe clerk position? How will you manage money if you accept?

    Just curious. Seems I’ve missed it in your entries.

    Anon

    April 14, 2010 at 16:12

  5. H&R Block also has software that offers free federal filing, $30 for each state. Very easy to use.

    Anon

    April 14, 2010 at 18:50

  6. TAXACT

    I had a million forms and opted for the datastorage too and only spent $17.95. Took me less than 2 hours and with VITA you have waaaaay more experience than me!

    Anonymous

    April 14, 2010 at 20:47

  7. Form 4868 is automatic for me each and every year. Have you ever considered filing for Chapter 13 Bankruptcy to pay off all this debt? You should be able to pay off all your tax debt and discharge most of those credit cards. The student loans survive but that might be something to consider to get rid of all this debt.

    Louisiana Solo

    April 15, 2010 at 01:47

  8. Turbotax… it’s the way to go.

    It will walk you through just about everything that 99.9% of people need to enter, and it comes with free Federal E-Filing.

    T

    T-Bag

    April 15, 2010 at 08:00

  9. This has been suggested numerous times, but, for whatever reason, it has not been undertaken.

    T

    T-Bag

    April 15, 2010 at 08:00

  10. At lest we forget, LoL has just become treasurer of a non-profit. Seriously, I can’t believe one single person who reads this blog would elect him to that position

    Anon

    April 15, 2010 at 14:52

  11. Whatever reason? Come on, bankruptcy is the last resort, not the first? And wouldn’t it be tantamount to “cheating” if I just slipped into bankruptcy court and accomplished my goal by discharging my debts? The point of this blog—and the overall project—was to pay off the debt myself, through my own efforts. Be it my labor, my ideas, or even something triggered by this blog. Why does everyone keep suggesting this as some quick fix? Bankruptcy, last I checked, is not something people are proud of and stains your credit report for 7 years—if not longer.

    And besides all that, if I’m making ends meet, albeit just barely sometimes, how could I even quality for bankruptcy?

    Laid-off Lawyer

    April 15, 2010 at 19:49

  12. Oh please…that’s such a nonsequitor, dude. No inescapable correlation exits between personal lives and professional performance of duties. Plenty of doctors engage in unhealthy behavior but they’re still competent and knowledgeable to advise patients on sickness and wellness. Likewise a CFO can spot an aberration on a balance sheet even if she just overdrew her own checking account. Ditto for cleaning person who lives in a messy apartment. Personal struggles do not invalidate what we’ve learned along the way. If I’d been blogging about my efforts to overcome alcoholism or to break my addiction to cocaine, then there’d be a better argument that my personal situation might interfere with my treasurer duties. And besides…as the treasurer I’m not actually managing the money. The executive director does that. I oversee the ED’s use of the money—make sure the numbers add up. Hence my mention back in A Whole New World a few months back that this position might help me see the benefits of budgets for personal use.

    Laid-off Lawyer

    April 15, 2010 at 19:55

  13. Well, I used Turbo Tax. For both federal and state. And with the audit protection purchase, it only cost about $150 or so. Compared to last year when I used H&R Block and it cost me $632.00 Insane, eh?

    Thanks for the suggestions. I didn’t know it was so easy to use.

    Laid-off Lawyer

    April 15, 2010 at 19:58

  14. Wonderful!

    Donnelly

    April 15, 2010 at 21:41

  15. A Chapter 13 Bankruptcy would allow you to pay off all your debts on a scheduled based on reality. A Chapter 13 is a payment plan that allows you to pay $x per month to pay all the tax debt and probably a small percentage of the credit card debt. I do not see any other options for you at $40k-$50k per year now.

    Louisiana Solo

    April 15, 2010 at 22:06

  16. A lot of things people charge for are easy to do for yourself. I suggest that the next time you consider paying for something, particularly a service, you investigate whether it’s something easily within your abilities. Or just ask the peanut gallery here whether it’s truly worth paying for.

    spaces

    April 15, 2010 at 22:27

  17. It wasn’t about the correlation between your own struggles and the role you have undertaken, more about the blatant way you ignore advice offered to you.
    Although, it does seem in this instance that you have taken that advice on board and used cheap software to prepare your taxes rather than just handing over money (that you don’t have) to a third party

    Anon

    April 16, 2010 at 02:20

  18. How can he BK anyway? Wont he be struck off from his professional body? Then he cant work? Prospective employers would also take a dim view, no?

    Dreamer

    April 16, 2010 at 09:26


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