I owe $7,000 in taxes

May 11, 2007 - Get free updates of new posts here

I know. Sucky, huh? I got a notice in the mail last month saying I owe that much to the government. That is strange since I have been hiding my money under my bed for years. Excuse the bad humor it’s late on Friday. Anyways, that is a crappy feeling knowing I made some mistakes and owe a fair amount of money.

What is Noah to do?

I called the IRS. Michael S, agent #14234 to be exact. “How can I help you Noah?”

“This sucks and I don’t want to give you another time. Nada. Nothing. Zilch.”

Michael said “Let’s Walk it out” as he started to dance.

Anyways, we reviewed the #s and eventually it was down to $2,500. BAMN.

What is the point of this article?

It’s funny when I realized that marketing and perception is all relative. I was so elated to only pay $2,500. Uncle Sam hooked me up! It was like they gave me a gift. When in reality that is still a ton of money.

Have you ever experienced something like this?

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15 responses to “I owe $7,000 in taxes

  1. Scott Hurff Reply

    Haha dude, I was right up there with you!!

    $8,000 in taxes.

    Got it down to $3,500.

    I felt like I got a mad sale price or something.

    But yet, I still lost $3,500. Then I felt that numb pit in my stomach when you have to do something and you can’t get out of it.

  2. Arjun Reply

    ugh, yes!! this year, uncle sam-i-am said i owed $17K in taxes from 2005.

    in reality, the confusion arose because i never reported my stock transactions. it was my first year filing taxes with stock trades, and since i had lost a little money (like $1k), I didn’t think I needed to file it.

    But then, BAM, I found this out the hard way: When brokerages send the government your transaction history, they only report your sale values – NOT your cost basis.

    in any case, i found this out the hard way, don’t ever make the same mistake!

    uncle sam: 1
    arjun: 0

  3. Peter Cooper Reply

    Jeez, while I hate the US tax system, I wish you could get such “reductions” so easily in the UK! Mine’s three times more than your original figure this year (and they wonder why people find it so hard to save, lol).

  4. Mike Macadaan Reply

    You need to use TurboTax’s Grey Zone Edition – only available on Mac from a called ‘Uncle Scam.’ The interview asks you questions like ‘Are you sure you didn’t donate 100K to one of the following organizations?’ and ‘While incarcerated, did you do any ‘volunteer work?’

  5. sri Reply

    I dictate to uncle sam how much i am willing to pay them. I use turbo tax and keep trying over and over again until i reach a figure that i think is reasonable. Lets hope i dont get audited.

    Read about the couple who always withold 30% of what they owe uncle sam and they write a nice letter saying that the reason they withold 30% is because they dont want that money to go towards financing the war in Iraq.

    Every year its the same story, IRS freezes their account and takes out the money that is due. But the couple feel good that they are not contributing willingly.

    Talking about relative price points….I just purchased a home and now, everything seems cheap.
    Change the kitchen fridge…sure…its only $1000.00
    One more thing i noticed about myself after purchasing a home is that since the house search was so exhausting, i am less keen to do price comparison with the stuff i want to buy for the home. Every store u go to, the item varies slightly….so its hard to do real comparison. Besides there is so much hidden costs when purchasing appliances.
    Their selling point is “we will remove and haul ur old appliances away for free” Off course u bastards! The old appliances are in perfectly good working order. I know ur gonna keep em.

  6. Brian Balfour Reply

    Its the 20oz coke issue.

    When coke released the 20oz version no one bought it because they thought it was too much.

    So then coke released a larger version (24 oz maybe?) and everyone started buying the 20oz coke. After awhile they took the larger version away and people stayed with the 20 oz version.

  7. Tomasz Gorski Reply

    Thanks for very interesting article Noah. btw. I really enjoyed reading all of your posts. It’s interesting to read ideas, and observations from someone else’s point of view… makes you think more. So please keep up the great work. Greetings

  8. Noah Kagan Reply

    Arjun

    That totally sucks. You definitely win in terms of most money! Did you end up refiling and showing that you made a loss?

    I had the same issue and then just refiled with a Schedule D to show I made much less than the actual gross proceeds of my stock sale.

  9. Noah Kagan Reply

    I accidentally put in $2,000 more in tax withholdings. The bulk of the money was that my stock grant was double counted since it was already included in my W-2. Lucky me the IRS guy asked about that!

  10. Chris Johnston Reply

    I would rather owe $2500 than be like those morons that are excited that they overpaid their taxes and the governent was nice enough to give it back to them after using it for a year interest free!