I got paid today for some freelance work, so I went to the bank and paid $700 directly to the principal of the mortgage. I can't wait for it to post. We make the regular payment next friday, which is payday, so that will be more off the balance. I just didn't want to wait another week to lump the payments all in together. It's too easy for money to be absorbed back into the checking account.
I also sent another $150 check to my IRA, plus a $362 check from earlier this week (paid for a late gig last year). I do like the new goal structure of concentrating larger chunks on one or two goals rather than sending tiny bits to more goals and waiting so long to see results. It feels so much faster. instant gratification, I guess.
I'm getting ready to do the taxes this weekend. I'm still waiting on one or two of my 1099s. Anyway, I usually do some soul-searching career wise once I see how my freelance income (1099) impacts our tax burden. I write A LOT of articles as a freelance journalist, but the fee per story is small, and this may be the year that it's not worth doing so many when my after tax income is so pathetic. I have one gig I'm thinking of dropping due to that.
This particular job: I write one column a week for $100 pre-tax, and the job requirements have increased significantly ( I now have to either photograph the topics myself or secure good photos they can run, which doesn't sound like a big deal, but considering the time it takes to do that, plus interview and write the story, plus the frustration, it's fast becoming way too much work for the money). So yeah...
I've contemplated dropping this gig in the past, but have waffled. Partly, I feel like I have to take all the work I can get given the economy and the state of the industry. Second, we're trying to pay off the house and put away for college, and pay for daycare, and even though it's not a lot of money, it adds up.
On the other side, I could probably make up the money through other jobs-- ones that paid more per assignment, but weren't guaranteed, and didn't pay regularly. I also have a finished but unedited novel that I never have time to work on. Of course, that doesn't pay, but it's my avocation rather than vocation, so that argument is money versus self actualization.
So yeah, pros and cons. I guess if it turns out I'm busting my bottom and I'm only clearing $30 a week for that assignment, it really will become not worth it any more. Any thoughts?
$700 to mortgage, career ponderings.
February 8th, 2013 at 09:15 pm
February 8th, 2013 at 10:46 pm 1360363605
February 8th, 2013 at 10:49 pm 1360363772
February 8th, 2013 at 10:54 pm 1360364085
February 8th, 2013 at 11:03 pm 1360364636
Anyway, to answer your thought on $30 a week. Sure, that sounds great on the surface, but when you look at how much work I'm doing that would be what, 1.50 - $2/ a hour? For a professional, college-grad level job? And I'm turning down more occasional, but easier and better paying, lower-stress projects? That is the rub. Sure, I could keep it, but should I? Opportunity cost plus pay after taxes might be out of whack. When I'm always stressed out and short on time, I have to weigh the worth.
February 8th, 2013 at 11:26 pm 1360365999
February 8th, 2013 at 11:55 pm 1360367732
February 9th, 2013 at 02:15 am 1360376137
February 9th, 2013 at 02:27 am 1360376852
February 9th, 2013 at 03:39 am 1360381141
February 9th, 2013 at 03:54 am 1360382054
Also, to be fair, the reason you are being so highly taxed is due to spouse's income. Would it help you to think about it as his tax? (That it should come from his income?) IT could be a fair way to look at it. Though I totally understand it is the bottom line that matters.
If you think there is some benefit in the long-run to working for $2/hour..., but overall is not something I think I would *ever* do. My time sure is worth more than that - if I need money, I'd rather go get a minimum wage job. Unless it is just a temporary stepping stone.
Overall I am in the "why work your butt off for pennies?" camp. IT was literally my spouse would have been working full time to bring home about the $10k per year, when our first child was born. His gross was $50k. That would be $10k FULL TIME. That's crazy. If you only made $9,000, I bet you could come up with that in MUCH EASIER ways. Even if you put most that energy to cutting costs versus earning more income. Or 50% of the energy to cutting costs and 50% to maximizing what you do earn.
You've already figured the tax savings, which is often quite huge.
You need to read some Money Mustache. Seriously.
February 9th, 2013 at 03:57 am 1360382229
February 9th, 2013 at 03:59 am 1360382346
February 9th, 2013 at 03:09 pm 1360422581
Run it through your tax software.
February 9th, 2013 at 03:42 pm 1360424528
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February 9th, 2013 at 04:21 pm 1360426862
February 9th, 2013 at 04:29 pm 1360427383
http://www.mymoneyblog.com/self-employed-solo-401k-vs-sep-ir...
February 9th, 2013 at 04:51 pm 1360428663
February 9th, 2013 at 04:55 pm 1360428909
February 9th, 2013 at 04:59 pm 1360429183
February 9th, 2013 at 06:41 pm 1360435266
Maybe instead of working for someone who's going to 1099 you, maybe find more short-term, one-time gigs where you don't have to report the income.
February 9th, 2013 at 08:04 pm 1360440272
Not reporting income because you did not get a 1099, is tax evasion. You are still supposed to report the income.
February 9th, 2013 at 08:33 pm 1360442026
And MM, I know right? I'm wondering if Turbotax had something screwy going on. Or, maybe it's only letting me deduct either the IRA OR the SEP.
I've got some time to work it out before filing (still waiting on two 1099s anyway). If I decide the solo 401k is the way to go for this tax year, I might just bite the bullet this year, and skip the SEP, for simplicity.
February 11th, 2013 at 04:57 pm 1360601830
I just never thought about it or came across this. I know this from a W-2 standpoint, but most my clients who are self-employed have way too much income for a Traditional IRA contribution. I have probably never seen this situation with a Schedule C.
It sounds like you can both max out ROTHs though?
I also think you could be well served by a tax consultation. Not that I think you should pay someone to do your taxes every year. But to really sit down with a professional who can look at your entire situation - I think it could only help you. Might be worth paying for once every 5 to 10 years. As you see, there is nothing "simple" about it.
February 12th, 2013 at 05:23 am 1360646604
I did run the numbers through turbotax with a solo 401k and it was much more advantageous tax-wise. It would let me stash about 17,000 in income away this year. The question is, can I afford to save that much, as my income mostly now goes to paying off the mortgage and paying for preschool.