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Name: margalit
Location: Massachusetts, United States Professional writer, educational advocate, opinionated ultra liberal mother of 18 year old twins, living life in the slow lane due to hypertrophic cardiomyopathy, congestive heart failure, and diabetes.

email: margalitc at yahoo dot com

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Monday, December 04, 2006

Eeeek! Good Financial News

The three words I never thought I'd say are Good Financial News. My financial news has been dismal since 2002, and now things are finally looking up a teeny tiny bit.

Today I learned that the pathetic cost of living increase I get from social security is 3.3%. But it's almost enough of an increase to offset the cost of Medicare without the prescription plan. I think I've decided not to do the prescription plan, since Walmart is now offering $4.00 prescriptions for all generics. Pretty much all my meds are generic and it will cost less than paying for the presciption plan. So Go Walmart. You totally suck on every other level, but hey, prescription coverage is good news for me.

Then, I had to call the IRS about some little piece of information and found out that all the back taxes I still owe after years and years of paying them off are going to all go away by May. May 2007. That's the banner month for me. No more several hundred dollar a month payments. I owe the money, I've been paying it painfully for years without complaint because it's my debt. But it's almost over. A light at the end of a very very long tunnel.

You see, I owned my own consulting business for 10 years. I had people subcontracting for me, but they were not my employees. Then the law changed, and the IRS decided that my subcontractors were employees and charged me back taxes for them. 12 of them. It was probably the worst setback I've ever experienced. From financial freedom to crushing debt in an instant. Man, did that suck. But I made the error (OK, the IRS changed the rules on me and I didn't keep up with the law) and I've been paying for my mistake for a very long time. Like since 1996. Ten long years of servitude to the IRS. Painful? You bet.

But it's almost over. One year ends this month. The next year ends in February. The last year ends in May. And then it's over. OVER. I cannot even begin to tell all you readers what a huge relief this is. For years my attorney told me to declare bankruptcy to get out of the debt, but I didn't want to. I wanted to see it through, and I finally have. It has been a terrible experience. But all of a sudden I'm going to start having more money. Not a huge amount by any means, but a couple hundred bucks a month and then some of extra money. Money that can pay for things we really need. Money that will enable us to maybe have some sembelance of a life.

Phew!

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2 Comments:

Anonymous Anonymous said...

yay for you! i feel your IRS pain. no one (my divorce lawyer included) told me that i had to claim the freakin spousal support as income and pay taxes on it.

4/12/06 7:30 PM  
Anonymous Anonymous said...

Yup, me and the IRS ... old buddies from way back.

Here's the short story: When I was working and had a career (that I lost after becoming disabled), and The Hubster and I were married the first year, he told me (erroneously) that most of his income was not taxable and not reportable to the IRS ... I believed him. He believed himself too. I didn't want to imply that he was being dishonest ... just uneducated in the ins and outs of accounting for income on tax forms. I, on the other hand, have a DEGREE in accounting. But, I was a newlywed and not in a good position to challenge his statements.

So, after three years of this, the IRS sent us a tax letter. You know, the one that says "You owe us money and we want it yesterday." Three years worth of back taxes.

We're about $1,200 away from paying it off (finally ... with penalties and such it was huge!).

We would have paid it off sooner but, like I said before, after a 15-year career in a government position that paid uber well, I was living on 1/3 the income from disability that I had to wait for ... for two years!

Yeah, I get it. It's rough. But, 3.3% sure will help. And once it's paid off, that will give us enough to maybe think about saving for something other than paying off the IRS.

So, congrats! You made the right decision, not filing bankruptcy. That would have been a 10-year blemish on your credit record.

5/12/06 9:09 PM  

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