vecturist

Well, they say bad things come in threes - between having my credit card stolen and losing my part-time job, I wondered what the third item would be. Well, I found out this morning (not the way to start a Monday). Like all Americans who owe money to the IRS, I waited until almost the last minute (April 10th) to mail my check. I finally got a little worried last week when I saw they hadn't cashed my check, so I decided to call. After about 45 minutes of waiting on hold and getting disconnected I finally got to talk to someone. No, the IRS has not received my check, but they have processed my return. Guess what, I owe them more money! A $10 late fee, $12 in interest, plus a $144 penalty for not making estimated payments. Fun. To top it off, my bank will charge a $29 fee for stopping the check (they said I can appeal when the charges hit my account).

I plan to appeal the $144 penalty for not making estimated payments. The IRS penalizes you for not having enough money taken out of your paycheck during the year. I actually do; my problem is that for the last couple years I've begun rolling over money from a regular IRA (funded by pre-tax dollars) to a Roth IRA (funded by after-tax dollars). Since I'm moving money that has never been taxed, it shows up as income, which appears as though I've never paid tax (the reason I'm doing the move between IRAs is that you have to pay taxes on a traditional IRA when you withdraw the money at retirement, with a Roth, the money has already been taxed, so no taxes at withdrawal, and since I make so little as a grad student, my tax rate is low).

Hopefully this will all get straightened out quickly and this is the third of three bad things.