Tuesday, April 15, 2008

The Taxes Are Done!

Yesterday morning I got to work on our taxes and really thought I would be mucking through all day. We use Quickbooks for the Island King's business and for several years I resisted really learning how that program works and while I used it some (mainly just for our checkbook)I relied on a handwritten ledger and a shoe box filled with receipts. It took me almost a week to figure our taxes last year and after that debacle I decided to learn how to really use QB. Well let me tell you that was time well spent. I finished our taxes around 1:00 yesterday afternoon! And the best news of all is that we don't owe near as much as I thought we would. In fact I was able to write a check to cover what we owe and send it off. What a relief! We owe so much for the year before that it will be close to the year 3000 before it's paid off and I was really afraid we would owe that much this year - which would raise my monthly payment to the IRS to an astronomical number. Of course the downside of that is that we didn't make as much money as we did the year before but as long as the mortgage is paid and there's food on the table I'm not complaining LOL

A friend of ours has a very successful business and he was over a few months ago. He told us that he hasn't paid his taxes in over 4 years but that he's decided to pay them this year (There's an idea LOL) The Island King asked if he had money put away to pay them with and he said No but how much could it be? We mentioned that the IRS charges HUGE amounts of interest and penalties so even if you don't owe that much initially, waiting for 4 years to file will really cost him. He just laughed and said "You're exaggerating - it can't be that bad" We didn't say anything to him but after he left we talked about how shocked he's going to be when he sees that it could be much worse than he thinks. Yesterday afternoon he stopped by and wasn't looking too good. We asked what was wrong and he tells us that he filed his taxes back in January. He owed quite a bit more than he thought he would but didn't think he'd have too much trouble paying it. Until Friday, when he received a letter from the IRS with the "adjusted amount" he owes. The penalties and interest from the past 4 years are more than it would cost to buy a small country. He'd spent the morning at the bank trying to get a second mortgage on his home - just to be able to make a dent in what he owes. I felt really sorry for the poor guy but he's an intelligent business owner - did he think the IRS would cut him some slack because he's a nice guy? There are a lot of things in life that you can let slide a little but paying your taxes is NOT one of them.
I'm off to clean the house, teach the Oldest Island Boy and repot some tomatoe plants. Have a good one!
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