I apologize for not fully explicating my personal tax situation in the last post.
As Suze Orman and other financial gurus have taught us, the following statement, in a vacuum, is completely idiotic:
"Thumbs up to overpaying throughout the year, as it worked out to be inadvertent savings. The nice thing is that it was pretty much completely unexpected, as I thought we still might owe some. I suppose that's why I'm not an accountant, yo."
What I should have said is something along the following lines:
"Unfortunately, due to uncertainty as to whether or not my supplemental income from my business/poker/freelancing would push us into the next tax bracket, we overpaid our taxes and received a sizable refund this year. While we could definitely control and account for our traditional day job incomes on a quarterly basis, my supplemental income fluctuated wildy from month to month, and at times appeared on course to be enough to bump us up a tax bracket.
I haven't been able to sleep at all, kicking myself, as we just snuck in under the tax bracket wire and got a refund, and we could have made $173.25 in pure, risk-free profits by instead placing the overpaid funds in an ING Direct account each quarter. Instead the overpaid money did nothing for us throughout the year, merely sitting there, gathering dust, until it was returned to us.
Unfortunately we were maxing out our IRA/401(k) contributions for the year from day one, we have no short term debt, and are as fully exposed to equities as we want to be. It sucks, as that was one reason why we decided to overpay in Q1-Q3 on my supplemental income, since our only viable, risk-free alternative for the funds was to put it into savings and make 3.5% on it. While we discussed potentially investing the funds that were ultimately overpaid in the equity markets (instead of overpaying them to begin with), the decision was mutually made that we'd not do that, due to the risk involved.
I hate that when we weighed the opportunity to potentially make $100-$200 in risk-free profits by paying the minimum owed each quarter, we decided against it. My junk aches from the self-administered blows to it. We made an idiotic, weak, emotional decision. We decided to overpay early in the year on my supplemental income and leave free money on the table, because we didn't want to owe a sizable amount at the end of the year and see it come out of savings, if we did indeed bump up a bracket due to additional income that fluctuated greatly throughout the year.
It's also unfortunate that my accountant didn't insist that we simply pay the minimum each month, and, if we did indeed bump up a bracket and owe a sizable amount, simply withdraw that sum from savings, pocketing the accrued interest. I can't believe I went with the human accountant, who advised us of all this but left the decision up to my wife and myself. Next time around we're definitely going with the robot accountant.
It's also unfortunate that my wife and I are both human, and not robots ourselves. While a rational part of our brains may understand that we sacrificed $173.25 in additional income for the year, a small, child-like part of our brain gets really happy when we get an unexpected refund, when we just snuck under the next tax bracket. It's the same part of our brain that likes to have fun and go out and eat, when we could maximize our EV by preparing the same exact meal at home for $7 less. The same part that buys overpriced popcorn at the movie theater instead of sneaking in trail mix in hidden pockets sewn into our coats.
I'm ashamed of myself, in exactly the same way that I hate that I don't pull the trigger on the 0% APR credit card game. I could make $300-$350 a year, in pure, risk-free profit, all for doing nothing more than taking out $30,000 in credit card debt. I cannot believe that I would leave that money on the table, sacrificing EV like that.
But let's not get distracted from what's important. I failed myself, miserably. It doesn't matter that it's fun to get a refund check, that my wife and I will enjoy it more and spend it in much more enjoyable ways, than if we had saved it penny by penny throughout the year. Instead of taking a trip or a kiln or other frivolous things we should only see the ghostly spectre of the $173.25 that we lost, for no reason whatsoever.
All I know to do is to continue to deal mighty blows to my junk as a small, penitent geasture and give you my solemn vow that I will never, ever let you down again."