In January of last year, I let everybody know that I owed the government more than $10,000. At the end of that post, I specifically made a note to “Plan better to pay my taxes in 2009″ and “Always trust God, no matter what.”
I had written the first note in particular because last year I had no money to pay my taxes. I wrote the second note because it was God’s miraculous provision that helped me pay my obligations by the deadlines.
So: How did I do on “planning better?”
Well, since I owed about $10K last year, I saved a lot of money this year. I figured $12K would cover it. But to be safe, I saved about $20,000.
In mid-December, I was shocked to discover that my tax bill is approximately $21,000. Whoa. That caused my heart rate to rise!
Fortunately, I only have to pay about $15,000 by January 15. I can postpone the remainder for a couple months.
I was really hoping that I’d have some money left over to pay off more debt. But, no. Such will not be the case.
On the bright side, I do have the money to pay my taxes, so my stress levels are still in check. :-)
Over Christmas, I joked with my wife: “Well, technically we don’t have any money at all since we owe it all to the government. But at least you can enjoy that rich feeling for a little bit longer.”
So my NEW note to myself for this coming year is this:
- Estimate tax obligations every quarter and save accordingly.
This way I won’t be making assumptions about how much (or how little) I owe the government — and hopefully there won’t be any nasty surprises when taxes are due.