New to BFS? Please click here to get started. See you in the comments soon!

Property Tax Appraisals Matter

For the last few years, I’ve been getting more involved in my local community mainly through and our neighborhood’s Facebook group.  I wanted to feel more connected to the people who exist around me.  What does this really mean?  I spend WAY too much time on social media.  AND, I get to see questions that I no longer see in personal finance blogs.  It can get a little stale preaching to the choir. Getting Blind-Sided by Property Taxes For example, one of my neighbors from got walloped by her bank for a couple of extra thousand dollars because her home’s appraised value zoomed up, she escrows, and the bank didn’t take enough every month last year to cover the property tax increase.  She knew in passing that the appraised value increased but didn’t know to protest it.  She also didn’t know what that would do to her property taxes.  So now she feels blind-sided. Crystal’s Take on Official Home Appraisals and Property Taxes Here was how I replied: It looks like a few people have already summarized the process. We receive our annual property tax appraisals from in the first 3rd of the year. They can increase the … Read more

Our Income Shell Game to Avoid Tax Drama

Disclosure:  This is a personal story from my point of view.  Don’t mistake this for advice.  Ask a professional for tax advice.  I’m not a professional. In short, don’t be an asshole and blame me for anything.  😉 We DIDN’T Owe the IRS $67,000 If you’ve been reading for a while, you know that we went through a 2 year saga from 2014-2016 with the IRS to prove we DIDN’T owe them nearly $70,000.  To summarize – after some tears, shit tons of frustration, some sleepless nights, and a classically AWFUL experience with a tax lawyer, the IRS agreed with us.  Yep, cost the IRS some paper and stamps for automated scary letters.  Cost us unnecessary stress and $5600 of expenses between the money-hungry lawyer (somehow magically was able to use ALL but $112 of our $5000 retainer to literally file two sets of papers and take 2-3 phone calls) and our new, actually helpful, CPA. Our New System After that total bullshit, we started paying that CPA to file our taxes every year (CPA-filed taxes get picked on less).  We also pulled the trigger to set up both of our main businesses officially (Budgeting in the Fun Stuff and … Read more

We DON’T Owe the IRS $67,000!!!

I’m not a tax professional or expert in any way.  This is just a personal experience story.  If you try to use this as professional guidance, you’re an idiot…especially since we are out more than $6000 even though we only really owed less than $100!  This is just to see that yet someone else got screwed by the system.  DON’T USE ME FOR GUIDANCE.  Thanks.  😉 Our 2013 IRS Tax Battle For anybody who has been following along, here is a synopsis of the crap we have been dealing with since March 2015: Mid-March 2015 – Received an official letter from the IRS saying that we didn’t disclose all of our Paypal income for 2013…and owed them $67,000!!! We responded with all of our documentation showing what we received and paid out and waited for them to reply. Mid-April 2015 – Received another official letter repeating themselves from March. Made an appointment with a tax lawyer. April 22, 2015 – Tax lawyer suggests calling and working it out with a real person instead of worrying about their automated letter system. May 2015 – Was told to send in an updated Schedule C for our online business that clearly denotes what … Read more

Budgeting in Self-Employment

The ups and downs of income when you're self employed are so hard to navigate. Here's a solid approach to budgeting in self employment and striking out on your own with a plan in place. I'm glad I'm not alone!

I thought it would be fun to update this post exactly 5 years after I originally wrote it…let’s see what’s changed… Yes, even though blogging was/is officially paying me more than my day job ever did, I budget in self-employment.  Specifically, I really dislike the idea of irregular paychecks and we strive to make it less stressful. My Paycheck Plan 5 Years Ago I had been building up a blogging income account at ING (now CapitalOne 360).  My hope was to get it to $10,000 by the time I quit my day job so I’d have more than enough padding on months that I don’t bring in enough.  I made it to $9200 as of July 15, 2011 and I took it right over the $10,000 mark with the last paycheck I received after giving my 2 weeks’ notice. I was planning on paying myself a biweekly paycheck directly from this accout so we would never experience a budget crunch at all.  In order for this plan to have worked, I decided to pay myself $1500 every two weeks. How It Has Worked for the Last 5 Years I’m going to pat myself on the back.  This plan has been slightly adjusted as our income fluctuated over the … Read more

How Tax Brackets Actually Work

I receive occasional comments and emails that lead me to believe that quite a few people believe that all of their taxable income is taxed at the same rate – specifically the rate of their highest tax bracket. Unless you are in the lowest tax bracket, this isn’t how it works. 2016 Tax Brackets Here are the tax brackets for 2016 according to the Internal Revenue Service: Single Taxable Income Tax Rate $0—$9,275 10% $9,276—$37,650 $927.50 plus 15% of the amount over $9,275 $37,651—$91,150 $5,183.75 plus 25% of the amount over $37,650 $91,151—$190,150 $18,558.75 plus 28% of the amount over $91,150 $190,151—$ 413,350 $46,278.75 plus 33% of the amount over $190,150 $413,351—$415,050 $119,934.75 plus 35% of the amount over $413,350 $415,051 or more $120,529.75 plus 39.6% of the amount over $415,050   Married Filing Jointly or Qualifying Widow(er) Taxable Income Tax Rate $0—$18,550 10% $18,551—$75,300 $1,855 plus 15% of the amount over $18,550 $75,301—$151,900 $10,367.50 plus 25% of the amount over $75,300 $151,901—$231,450 $29,517.50 plus 28% of the amount over $151,900 $231,451—$413,350 $51,791.50 plus 33% of the amount over $231,450 $413,351—$466,950 $111,818.50 plus 35% of the amount over $413,350 $466,951 or more $130,578.50 plus 39.6% of the amount over $466,950 … Read more

Our 2015 Taxes – How About You?

I started this site to be frank about money. I like having give-and-take conversations about actual, specific dollar amounts of all sorts of stuff. So let’s talk taxes in specifics since we got to read all the general stuff all over the dang place over the last few months. Our 2015 Numbers So, 2015 was technically a lower income year than “normal” for us even though we sailed along great and still saved for our future. We brought in about $86,000 in overall earnings. But I cracked up laughing as my eyes took in our 21 pages of taxes – deductions flowing like freaking water. Expenses like mileage for pet sitting and sports officiating and the business expenses like our dedicated office and whatnot just kept hacking into the $86,000 we made. Then the $11,000 contribution to the SEP IRA took a chunk out too. Then our itemized deductions took out a $16,000 chunk. In the end, we paid taxes on $22,000 (about $2500) plus our self-employment taxes (about $8900). $10,900 total. We paid in $18,000 over the year. So, we ended up with a $7100 refund that we chose to let them keep for this year’s taxes. We won’t … Read more

Warning from My Dad – DO NOT FALL FOR IRS SCAMS!

My Dad doesn’t email me much in general, so when I got an email with a post suggestion from him yesterday, I tuned in. Crystal, I received the email in the photo which is obviously a scam, and I already knew not to open any attached links. Anyway, as I wanted to report this to the IRS, I looked at their website: Basically, the IRS requests these type of emails be forwarded to [email protected]  As indicated, do NOT open any of the links in these emails.  Once you forward them to the IRS, delete them and also from your trash bin. Take care, Dad PS  Also, you might let your readers know that in many of these types of scam emails, the wording, grammar, punctuation, etc. appear peculiar which should definitely be another red flag. Thanks, Dad! This is a great time to remind everyone to be careful with their data. Don’t fall for any IRS email or phone scams and keep in mind that you can always contact an organization yourself through searchable contact info instead of trusting where an email or call is really coming from…harder to scam you if you call the organization directly.