It’s not been a great week over here at Counting Zeros. It started bravely as I set forth to file those taxes. I did it. And I did it when I said I would, days before the actual deadline. But little did I know that the back-of-the-envelope calculations I made last weekend — which lead me to feel rather peppy and pleased, would be crushed by a single click of the online tax submit button.
My math hadn’t been wrong — I really did make £5,000 after tax on my rental property, but I was about to discover that my employer deducted less than they should have last year. So at 9.30pm on Monday night I wearily took out my debit card to pay a £5,600 tax bill — which is almost double what I would have paid had I only to pay the tax on my flat.
On top of this sad reality check, the process had been slightly disturbing … I cannot fault Her Majesty’s Revenue and Customs — never have I seen such an easy-to-read tax form, but even so there were terms and explanations that went straight over my head. I was left with that nagging feeling that I’m missing out on important deductions which might have saved me some money if only I had any idea what they were talking about.
The moral of the story is that life as a financial ostrich is so much more comfortable. At least on a day-to-day basis. Had my employer taken out the right amount of tax I’d be no worse off and I’d get to enjoy the bliss of ignorance.
The reason for the miscalculation by BIF (Big International Firm) is that my year-end bonus bumped my earnings high enough that I lost my tax-free allowance. When I mentioned this to another tax-filing friend she replied, “well, that’s why you need to make sure you take some of your salary over the course of the year and put it into a pension fund.”
Old Me’s head would’ve hurt when she said that as my internal Eyeore fell to the floor with the mention of additional financial homework, but New Me is slowly coming to accept that…
while taking my head out of the sand means being forced to remember why I shoved it in there in the 1st place, it is just POSSIBLE this might serve me better in the long-run
So yes, I’ve more to learn about tax deductions, tax allowances and what to do when I’m about to earn just enough money to reach that next level tax penalty.
As for my actual homework assignment — was which to find myself a seminar that might enlighten me financially — this again called to mind the ostrich. TALK ABOUT MIND NUMBINGLY BORING. Even surfing this topic did psychic damage.
One thing I did discover is that there appears to be a huge gap in the market. For anyone out there who is A) financially savvy, B) entreprenurial and C) able to make accounting life-affirming, if such a creature exists, you could charge loads educating the rest of us.
For the most part my search was flooded with 8-12 week learn-to-budget night classes in depressing parts of town. There were moments of hope when I’d spot a more inspiring event, but in each instance these turned out to have taken place sometime last year. Just when I was about to give up and try again when my will to live had resurfaced, I asked Google a more precise question — about rental taxes and property … and stumbled upon a dubious sounding offer.
No doubt a sales gimmick, the “the UK’s leading property investment educational company” is, for a limited time only, offering free 2-hour classes that normally cost £297. I clicked on the locations and found that they had several upcoming dates not too far from my local neighbourhood — so I’ve enrolled.
On Sunday week (February 12th), I’ll be at a nearby hotel from 10:30-12.30. IF THERE IS ANYONE OUT THERE WHO’s EVEN A TEENY BIT TEMPTED, PLEASE COME WITH ME! Here’s where you sign up.
My week of painful truths and seeping levels of optimism did prompt me to reconsider the merits of being an ostrich. And this in turn lead me to put off some of my financial homework to investigate why it is that ostriches put their heads in the sand (Google was invented for procrastinators).
And guess what I found out? That there’s been a huge conspiracy. Ostriches do NOT put their head in the sands. But what about all the photographic evidence? Hoaxes!!! The lot of them. Ostriches only bury their heads when a trickster photographer digs a hole, places food in it and steps back far enough to make it appear on camera as if the ostrich is doing what false legend swears they do.
When confronted with unpleasant realities, real ostriches run ….
Which leaves me plenty food for thought as I recover from the week’s travails.