Monday, January 11, 2010

More money, more problems

Last year this time I started on a personal crusade to get rid of almost $9,000 in credit card debt. It took me less than a year, but I got it done, and used this blog to tell the story and challenge you all to get rid of your own burden of consumer debt.

I wish I could tell you that after you get rid of one big problem, no more pop up but we all know that's not life. And since I believe that the best way to deal with problems -- financial or otherwise -- is confronting them directly, I'm going to share my latest challenge with you. I found out last month that I owe the IRS to the tune of more than five grand. Yep, that much.

How I got there is fairly simple and all my fault: I had significant freelance income for a few years that I didn't have taxes withheld from and it caught up with me. The good thing is I'm not ignoring the problem anymore and since the credit card debt is gone I should be able to knock it out pretty quickly. The bad news is this pushes back some other goals I had for the cash I freed up by no longer having to make a credit card payment.

Since this is a new year, I'm going to use my screw up as a learning opportunity for you by doing a new series of posts on tax strategies, with the help of Michael Ellis, a certified public accountant who runs a tax preparation business in the DMV. I hope that that, along with my $0 Balance Challenge to get rid of your credit card debt, will help you all leave 2010 in far better financial shape than you came in.

image: Michelle Meiklejohn/


mr. nichols said...
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mr. nichols said...

what up big homie and happy belated. i feel you on the freelance income. the irs got me with that too last year.

question: i'm in the process of eliminating my credit card debt. i don't use the cards anymore and i recently set up payment plans to get rid of the debt. i hear about these services that consolidate all your debt so you only pay one "low" amount a month. seeing as though i'm paying off two credit cards and student loans, is something like that worth looking into or should i keep doing what i'm doing?

peace to you my dude. keep doing your thing.

Keith T. Reed said...

Good question. I'm going to answer this as a separate post next week.