Tuesday, March 13, 2007

Tax Cheat

Turns out I was cheater in 2005. I got a big fat envelope in the mail from the IRS last week that turned out to be a bill with interest added. The letter said they had records of $6300 something in income that I hadn't reported on my 2005 return. I remember when I did my taxes that year that I left some out but I thought since I hadn't heard anything for so long is wasn't anything anyway. I practically forgot about it. I got a 1099-misc with that amount on it a while after I got all the rest of my tax documents that year. I used Turbotax on the web like usual and when I tried to enter this income, it led me down a path of questions that I had no answers for. I think they were questions like what was my company name and what was its' Federal tax ID. I didn't like the look of it and since I couldn't answer the questions I made a note in my records and I just skipped it. I figured they'd come after me later if it was an issue. This income was the second lump sum my employer paid me for creating our website. When I reported that same source of income on my 2004 return, Turbotax didn't ask me all those weird questions. My employer paid me as an outside vendor rather than an employee so it wasn't on my W-2 like normal and my checks for this never had taxes or anything taken out of them. I've used that money mostly for investments since then. Good thing I'm disciplined and I didn't blow it on bags of weed or hookers or something so I won't have any problems paying this bill now. Actually I'm using my return from this year to pay it. What sucks is I was making plans for that money before I got this bill in the mail. I got a few thousand back this year on my return and now I have to pay it right back again.

No comments: