Wednesday, May 28, 2008

The Tax Bill Cometh

All day yesterday I was formulating in my head a post about how we hadn't yet received a bill for our federal taxes, lamenting how poor a job the IRS was doing in sending it out. Which is pretty stupid, actually, since the taxes were due over a month ago. So it was really me who did a lousy job by not preparing for the nearly $4000 we owed for 2007 taxes.

But I digress. It was all spoiled yesterday when I opened our mailbox and pulled out a shiny letter from the IRS, stating that we have an amount due on our income tax. Finally! I have been like a little kid, running to the mailbox every day, hoping upon hope that the bill would be there. (Well, not actually running, more like walking briskly from my car, parked directly outside the post office.) I just couldn't wait to get this bill. I was so upset and irritated that I made the mistakes of not withholding enough, not filing early enough, and not saving enough to pay the taxes on time. Finally I can fix it and make it all go away.

The original tax due in April was $3481. At that time, I sent in a check for $500, which brought the "overdue" amount to $2981. The underpaid tax was then penalized a half percent for each month overdue (April and May), or $29.81. Then 6% interest was charged on the principal for the 41 days overdue, which came to $20.10. Now, I am not a big fan of interest or fees, but compared to some I have seen in the past, these are incredibly reasonable. I was expecting worse.

My husband got paid today and I will be getting my paycheck tomorrow, which together provides us with enough to pay off this bill at the end of the week. Before I got ahead of myself, though, I looked deeper in the mail and saw another letter from the IRS - this one about the economic stimulus package. It stated that we would be receiving $1200 no later than May 23. The letter arrived in my mailbox on May 27. Then, in small print on the back, it mentioned that if outstanding taxes were owed, the economic stimulus would be applied directly to the balance.

I would love if they took the stimulus check and reduced the tax bill by $1200. However, I don't want to pay the tax bill if it's going to be reduced by $1200 in the near future. I called the number on the tax bill to figure this out and got some weird static on the other end, so I will have to call the number on the stimulus check letter. I am just trying to be patient and accept that we will pay it off soon.

3 comments:

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Anonymous said...

Yes, they will take your stimulus check off the balance you owe. I believe it is on the IRS website.
Great Job!

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