She Strengthens

Facing the Music: My Journey to Tax Redemption

A False Sense of Security

I thought I had it all figured out. I had graduated summa cum laude, landed a dream job, and was traveling the world. But little did I know, my biggest challenge was yet to come – adulting. Specifically, dealing with taxes. When it came time to file my taxes for the first year of living on my own, I froze. I had always had help filing my previous tax returns, so I had never done it on my own. And to make matters worse, I had to file state taxes in two states due to my recent move.

The Consequences of Procrastination

I put off filing my taxes, telling myself I’d do them later. And later turned into never. This pattern continued for five years, with me convincing myself that I had paid my taxes all year and would be getting a refund anyway. But deep down, I knew I was avoiding the inevitable.

Facing Reality

This year, I finally decided to face the music and find a tax preparer who could help me sort out my mess. I was nervous about meeting with a stranger and explaining my situation, but I was also relieved to be taking action. However, my relief was short-lived when I discovered that state taxes were not deducted from my primary income source for four years. I was in shock.

Lessons Learned

The worst thing that can happen is that you owe money. But in my case, I owed a total of $4,216 in back taxes. However, I was getting a refund for six years of federal taxes, amounting to $5,887, as well as a $311 refund from my current state’s taxes from 2015. This put me at a total refund of $1,982, minus the $420 tax preparation fee, leaving me with a net profit of $1,562.

Cash Flow Conundrum

But here’s the thing – I didn’t have the cash to pay my state taxes upfront. So, I had to ask my mother to front me the money, which I will repay once the federal refunds arrive. This was a tough pill to swallow, but it was a necessary step in getting my finances back on track.

Takeaways

The obvious lesson here is to file your taxes on time, every year. Don’t put it off, don’t avoid it – just get it done. And make sure to check your pay stubs regularly to ensure that state and federal taxes are being withheld. It’s also essential to review your W-4 annually to see if any of your information has changed.

Moving Forward

I’m grateful to have finally faced my tax demons and taken control of my finances. It wasn’t easy, but it was necessary. And I hope that my story can serve as a warning to others – don’t wait until it’s too late. Take care of your taxes, and they’ll take care of you.