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Story 181 for Stupid Tax
We were the Hare, not the Tortoise
Original story submitted by Brad & Susan Bowles
on January 30, 2013
Location:Bloomington, Illinois
Age: 45-55
Gender: female
on January 30, 2013
We were the Hare, not the Tortoise
We were so gazelle intense that we decided in October to place our home on the market and downsize to a smaller home. We didn't heed Dave's advice when it came to real estate (be the tortoise, not the hare!!!). We purchased a less expensive home in Oct, before we sold our more expensive original home. It has been 4 months and not one showing on our original house (due to price range & school district). Also, there is now a lawsuit against the subdivision developer, which now makes our home very unlikely to sell any time soon. We've been carrying 2 mortgages for 4 months. Yesterday we decided to place our new home on the market and place this in God's hands. Our home was listed on MLS tonight and within an hour we had a showing; and a great offer 1 hour later!!! I think we set the record for the quickest real estate sale in Illinois! Amazing what God can do when you turn your problems over to him! But, we do owe the 'stupid tax' - 4 months of double mortgage, interest on a bridge loan for the down payment of the new home, plus the $10,000 for the privacy fence in the new home. What hurts the most is that we were only $3,000 away from being debt free before we started this stupid adventure. (Paid off $80,000 in debt in 2 years) Yes, we were VERY stupid! But we will soon be back on track and debt free very soon! Thank you Dave Ramsey for this great lesson! This is the 'stupid tax' that we will use to help others avoid the pitfalls that we endured! Lesson learned.....be the Tortoise, NOT the hare!!!
27 of 28 found this story helpful.
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Story 182 for Stupid Tax
No More Student Loans!!
Original story submitted by Kristi
on January 29, 2013
Location:Colorado Springs, CO
Age: 25-34
Gender: female
on January 29, 2013
No More Student Loans!!
My husband and I have made so many bad decisions with our finances. We have been snail intense with our Baby Step 2. This year is the year we have decided that enough is enough. Our debt is keeping us from the call of God in our lives, and until we pay it all off, we can't be free to go on the missions field.
The stupid tax is this: We took out a small student loan for my husband to work toward finishing his bachelor's degree. He did 1 semester, when we decided that God wanted us to go a different way. All semester we were saving in order to pay cash the following semester, and only have the 1 loan. Well, since we decided to go a different direction, the loan entered into the 6 month grace period before we "have" to pay. I know from experience how these things work, and since we had no deisre to pay additional interest on our stupid tax, today we PAID the entire loan, $1800 in full.
All of our current debt is student loans from my bachelor's degree, and by the end of 2013, I plan on coming to Nashville, Dave, to do our debt free scream!
Stupid tax=Student loan. Thanks to Dave's teachings, our stupid tax this time was minimal.
4 of 7 found this story helpful.
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Story 183 for Stupid Tax
Converted IRAs to Roth IRAs in wrong order!
Original story submitted by Retired Boomer
on January 28, 2013
Location:Spokane, WA
Age: over 55
Gender: male
on January 28, 2013
Converted IRAs to Roth IRAs in wrong order!
I will be paying a "Stupid Tax" because I converted my 5 year younger spouse's IRA to a Roth IRA before I converted my own. My logic at the time was her IRA was smaller than mine, so I could "afford" to convert it first and pay the 25% tax due. I then started converting portions of my traditional IRA to a Roth IRA each year after, but it will take me at least 10 more years to finish converting my remaining IRA balance to a Roth IRA and still maintain a desired max 25% marginal tax rate.
Unfortunately, I will attain age 70.5 in four more years and will then have to additionally take my annual taxable "Required Minimum Distribution" BEFORE I can convert any more of my remaining IRA balance to a Roth IRA each year.
If I had only converted my own IRA balance BEFORE converting any of my younger spouse's IRA, I would have at worst deferred taxes on any RMD for 5 more years. At best, I may have been able to avoid ANY of the RMD distribution taxes by completing all conversions before any RMD requirement kicked in.
11 of 12 found this story helpful.
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Story 184 for Stupid Tax
IRS (I'm Really Stupid)
Original story submitted by Trying To Stay Positive
on January 28, 2013
Location:Waukesha, WI
Age: 35-44
Gender: female
on January 28, 2013
IRS (I'm Really Stupid)
Let's start with the crux of the problem. My husband and I owe, what I feel, is a large sum to the IRS for 2012. We worked so hard to build our snowball. This included refinancing the mortgage at a great rate, to well within 25% of our income, with 15 year fixed interest, saving tens of thousands of dollars by the end of the loan (more if we can pay it off early), and put our "skipped" mortgage payment into the principal. Sounds like a perfect idea, right? We eliminated traditional childcare, and were very savvy about our medical choices. I am fortunate to work at a place where I am paid for overtime, and since business is doing well, have been working as many hours as possible to put toward our snowball. A few things happened: we made a significant amount of additional income, but we reduced and/or eliminated several areas for deductions on our taxes - didn't put pre-tax money into flexible spending for daycare, reduced our flexible medical spending, and eliminated a month worth of mortgage interest. While we put the money we saved into snowball, these were normally deductions that we would take when filing our taxes. When we were trying to figure out what happened, we realized ("duh moment") that with the combined effect of additional income and significantly fewer tax deductions, we had not withheld enough money on our federal taxes, and now we owe ... big. We will be working for the IRS for a while, rather than our snowball, and we were so close to zero debt (less the mortgage) that we could almost touch it. This was REALLY stupid. Pay attention to your changes in your financial plan, and make sure you take into account how they will affect your bottom line come tax time to avoid the same dumb mistake!!
15 of 16 found this story helpful.
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Story 185 for Stupid Tax
Sallie Mae Co Signer
Original story submitted by Mema59
on January 27, 2013
Age: over 55
Gender: female
on January 27, 2013
Sallie Mae Co Signer
My daughter and her husband asked me to co sign his loan for school. I knew what the Bible said, but did it anyway. I thought well, what can happen, he's going to medical school. Well a divorce later, he is no where to be found. His parents won't tell me where he is at "he has a stressful job". What was $25,000 is now $40,000. He never paid one payment. I tried to find him, no luck. The loan went into default, Sallie Mae made a deal with me. I must pay $167 a mth for the next 23 years. My daughter is now remarried with 4 children, and very little money, so she can't help. I am reaching retirement now, but must continue to pay. I saw his picture and it looks like he is working in a hosipital in London. I can't find him anywhere in US. When I spoke with his mom, she said that she is paying his other $325,000 student loan for medical school and she was not going to add mine. I signed it, I pay it. So learn from my mistake, I was not working at time I signed the papers, but I will be paying for it rest of my life. Now that's stupid tax!!
18 of 18 found this story helpful.
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Story 186 for Stupid Tax
Flooded by the Stupid Tax!
Original story submitted by Shannon Herring
on January 18, 2013
Location:Louisiana
Age: 35-44
Gender: female
on January 18, 2013
Flooded by the Stupid Tax!
In south Louisiana, flooding is a norm. We were required to have flood insurance partly since our home is a mere 2 inches below the base flood elevation and because of a revamp of the flood maps in our entire parish.
Unbeknownst to me, our mortgage company ONLY requires us to have flood coverage equal to the principle balance of our loan. Originally insured for 187K - our payoff for the mortgage is only 90K. As we griped and complained and sometimes wept over the rate hike over the 9 years we've been in our home, little did we know from our knowledge OR that offered CLEARLY by the mortgage company, we've been paying the Stupid Tax for almost 9 years.
This WILL be remedied prior to our insurance renewals this year!
Our pocketbook was perishing from lack of knowledge....
12 of 20 found this story helpful.
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Story 187 for Stupid Tax
YOU CAN'T "HELP" SOMEONE SAVE THEIR HOUSE!
Original story submitted by debtfree2012
on January 18, 2013
on January 18, 2013
YOU CAN'T "HELP" SOMEONE SAVE THEIR HOUSE!
This story is on behalf of my boyfriend. His parents divorced when he was a teenager and during the divorce settlement his mom decided to move out of his childhood home letting his dad take ownership of the home and of course the mortgage payment.
His dad has always been bad with money; taking out too much student loans, credit cards, home equity lines of credit and of course much worse, he was a gambler.
My boyfriend got a call in 2009 (we were 24 at the time) and his dad NEEDED to borrow $8,000 to catch up on the mortgage payments. His dad was retired military (pension), had a great full-time job and even a part-time job during tax season.
HOW IS HE BEHIND ON HIS MORTGAGE? In retrospect it wasn't an income/payment problem it was a priority problem.
My boyfriend wanted to help so he decided to take $8000 out on a personal loan for his dad. He asked his dad for the mortgage number and information so he can call the mortgage company and pay them directly.
His dad gave him a guilt trip saying his own son doesn't trust him and telling him he was already ashamed for asking to borrow money. So my boyfriend just handed him the $8000 check.
In 2011, a letter was posted on the garage, the house went into to foreclosure and up for auction.
We'll never know what his dad did with that $8000 and their relationship has never been the same.
31 of 31 found this story helpful.
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Story 188 for Stupid Tax
Peace of mind... Not so much!
Original story submitted by Family of Five
on January 11, 2013
Location:Dallas, TX
Age: 25-34
Gender: female
on January 11, 2013
Peace of mind... Not so much!
In 2008, my husband and I traded in our only car, his two-year-old truck and financed two used, reliable three-year-old vehicles from the dealership I worked at. Their payoff dates were in 2013. The SUV payment was $305/mo, the car was $370/mo. We rolled over a little bit from the truck into the car, but he had to commute 25 miles to work every day, so we felt it was worth the difference in gas costs. Fast forward to February 2011. We find out we are expecting twins! We decide that our used cars are getting up in miles, and we want something new, with warranties in place to protect us from mechanical failures. Also, we didn't think we could fit three carseats into the old car, so we wanted a bigger car. My husband had also been issued a company vehicle to commute with, so our SUV just sat in front of our house. The SUV was worth exactly what we owed, but we still owed about $3300 over value on the car. We decided to trade in both vehicles for a new, bigger car. The dealership I worked at gave me a huge discount on a new car that had been sitting on the lot for a few months because the color and trim level weren't very popular, so we took it... and rolled over the $3300 from the old car. To the dealership's credit, they tried to talk us out of it, but we wouldn't listen. I needed that "peace of mind" I would get with a new car, and as I put the three carseats into it I was convinced they wouldn't have fit in the old one. Then we realized way too late that the cost of childcare for three children under four was much higher than my salary, so I had to quit my job when the twins were born. Now we have a $488.17/month payment on an ugly new car that we are barely keeping up with and having to live with family. I've now gone back to work, but I pay as much in daycare as I make, although when our oldest starts kindergarten this fall that should get better. We're kicking ourselves, because if we had just sold our SUV in 2011, when it was worth as much as we owed, and kept paying our $377 payments on the other car, it would have been paid off this year. And with a little more research (too late), we found out that three carseats would have fit just fine in the old car. Peace of mind with a brand new car is NOT WORTH almost $500/month when you can't work! Stupid, stupid, stupid tax for sure!
27 of 27 found this story helpful.
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Story 189 for Stupid Tax
a new kind of bridezilla
Original story submitted by Beth
on January 10, 2013
Location:Tx
Age: 25-34
Gender: female
on January 10, 2013
a new kind of bridezilla
I had a good friend that moved in with me when i advertised for a roommate, thinking that having someone to split the bills would make my budget go further. We got along great but month after month had a new excuse of why she couldn't pay her share and i foolishly bought her excuses, i got her a phone on my plan cause she didn't have credit to get one of her own at the end had to shut her phone off after she kept running the bill up to $300, the result being my phone would get shut off also till i paid mine and her share. Also building up to this mess she was to get married, she told me her grandmother said to pick out a dress and she would pay for it. I went dress shopping with her, she found the one she wanted, it was on sale until that day only. Because she had no credit i got a davids bridal card to buy the dress, she told me she talked to her grandmother and that i would be paid for the dress when she came for the wedding. She gave me a big hug for helping her out, said i was her maid of honor. Also i put one of the other bridesmaid's dresses on the card also with the promise that i would be paid the next week for it. When the wedding day came i was devastated when i was placed at the back of the bridesmaids demoted unknowingly from maid of honor. The new maid of honor who dress i bought has never attempted to pay me. The bride kept making up excuses as to why i didn't receive money for her wedding dress. I finally confronted the grand mother and was told that she never agreed to buy a wedding dress, so i had been lied to. The card was no interest for a year. Just shy of a yr after the wedding the bride had not paid and avoided me and even acted as if she didn't owe a thing. To avoid getting hit with a years worth of interest i refinanced my truck to pay the card off. She at first avoided me but eventually disappeared completely, therefore i will never see a cent of it. Stupid tax amount approximately $1900.
16 of 17 found this story helpful.
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Story 190 for Stupid Tax
Consolidon't
Original story submitted by Erin
on January 4, 2013
Location:Nc
Age: 25-34
Gender: female
on January 4, 2013
Consolidon't
Hi, my name is Erin, and I'm stupid. So stupid, that I paid a HUGE stupid tax!! My husband and I both consolidated our student loans through nelnet prior to getting married. When I updated my surname, Nelnet began routing my student loan payments (which were on auto draft) to my husband's account. I corrected the error a few times, then got annoyed & lazy and let it go. "Eh, I'll deal with it later"....a few days became a few months. I put it off for so long that my loan went into default! It was purchased by the guarantor! At this point, I removed my head from my rear end and dealt with the situation. They were able to remove the default from my credit report....3000 dollars later, that is. And that's 3000 extra, tacked onto the principal. Lesson learned folks- you can make every payment on time and still go into default if you're lazy enough. STUPID, STUPID TAX!!! Stupid me. The next post I make will be a debt free post, mark my words!
11 of 13 found this story helpful.
4.7 out of 5
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