Weekly Roundup: Tax Lessons Learned

Last weekend I finally bit the bullet and paid taxes…twice. First I had to pay additional money for 2009 (more on this lesson learned later). Then I had to pay quarterly estimates on 2010 self employment income. Needless to say, it put me in a pretty foul mood. But, I did learn a couple lessons to carry forward to this tax year.

Since starting my side hustle here at Frugal Dad (and the occasional freelance writing gigs), I’ve been setting aside about a quarter of my income to pay taxes. Unfortunately, without any extra deductions (we just recently bought our home) or credits, saving 25% of my side income was not enough to cover self employment taxes. From now on, I’ll be saving one-third of my income and making higher quarterly estimates.

Enough about taxes, let’s move on to a more positive subject.

The Frugal Roundup

Paying Off Your Student Loans While Carrying a Mortgage. This is a guest post from Green Panda Treehouse. They make some great points on why it may be beneficial to save up for a house while paying off student loans. Personally, I would pay off the loans first. (@The Digerati Life)

Struggling With Time Debt. A lot of us have (or had) debt at one point. What about your time? Do you need to declare bankruptcy on your schedule? (@Get Rich Slowly)

26 Life Lessons I’ve Learned in 26 Years of Living. Baker provides some wisdom from his life. (@Man Vs Debt)

Why Do We Work So Much? Here is an excellent post by a rather new blog.  (@Pop Economics)

Best of the Rest

Comments

  1. We got slammed by the real estate downturn when I had to change jobs so I’m not in a big hurry to buy another house – not that I could afford to do so anyway. In my case I’m older but have significant graduate school debt as well as some cc debt that we’re now really trying to get out from under. At our current rates of repayment the cc debt will be paid off in early ’12. At that point I’m probably going to start putting most of the snowball into savings. We have no retirement savings, no college fund, and a very modest emergency fund – we can’t even afford to get our kids braces at this point – and getting those things started is a higher priority than pre-paying down the student debt. Or, for that matter, buying a house.

  2. Thanks for identifying a potential tax snafu… Hopefully, you didn’t run into any pentalties! Coming from a previous self employee life (for a few years, I was a software developer), I hated calculating self employment taxes.

    Afterall, it wasn’t my forte (at least back then…, since then… I’ve learned a few things)!

    • I avoided the penalty only through the series of available exceptions (pay more in taxes than you did the previous year based on this year’s rates, etc.). It’s all very confusing, but I rely on TurboTax to guide me..

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