I Just Wrote a Check for $3,500…

I just wrote a check for $3,500.....Yes, folks.  You heard it.  I just wrote a check for 3,500 smackaroos…and it wasn’t for anything awesome like a vacation to Aruba or a hot tub for my back deck.  Unfortunately, the $3,500 check I just wrote was the June 15th installment of my personal income taxes.  What’s even worse is that the $3,500 I just paid in is ON TOP of the hundreds of dollars we’ve been withholding from Greg’s paychecks every month.  Have you ever heard the saying “mo’ money, mo’ problems?”  Although I’m only making a moderate salary as a freelancer, I’m still feeling slightly resentful about the money I just paid in.  When I think of how many freelance jobs I did to earn $3,500, my brain actually hurts. That’s a lot of freaking jobs, people!   Becoming self-employed made me feel like a rebel without a cause, but paying income taxes makes me feel like I’m not really the one in charge.  I no longer have a boss, but I’m still a slave to the man…..and I don’t like it at all.

However, I do think that it’s weird that I’ve never felt angry about paying taxes before.  After all, I’ve been paying income taxes for over fifteen years.  And honestly, I hadn’t thought much of it until now.  So, why does writing a check for my taxes feel so different?

Death by a Thousand Cuts

Greg is the one who estimated my tax payment, and he may have shouted some expletives when he figured out how much we had to pay.  Although it stressed us out, he was also able to explain why writing a check for our taxes feel so incredibly different than paying them via payroll deduction.  Greg thinks that paying taxes out of your paycheck is a lot like financing a car.  Since you’re only paying $300 or $400 per month, you don’t have to experience the awful feeling of handing over 20K of your hard-earned cashIt’s death by a thousand cuts, and it doesn’t hurt nearly as bad as paying for a big purchase in one  lump sum.  On the other hand, paying cash hurts.  I remember when we paid off the last $11,000 of Greg’s student loans in one lump sum.  I did it through our online bill pay, and I could barely bring myself hit “submit” even though I knew it was the right thing to do.  It was painful, and maybe that’s how it should be.  Always paying cash for things has taught me to feel the real impact of my spending.  It’s may also be the reason why I’m so incredibly cheap.

With all of that being said, I certainly don’t mind paying taxes.  After all, I enjoy the roads I drive on and the plethora of public services I have access to.  I love the fact that police and firefighters are available 24/7 to save people from peril or their own stupidity.  However, I feel like I’m paying a lot.  Too much, maybe. We’ll just have to see how it works out.

So, how about you?  Raise your hand if you love paying taxes!  How do you feel about paying taxes in a lump sum vs. paying weekly installments?





About Holly

Holly Johnson is a wife, mother of two, and frugal lifestyle enthusiast. She is the co-founder of Club Thrifty and a staff writer at Get Rich Slowly, Frugal Travel Guy, and U.S. News and World Report's "My Money Blog." Holly has been featured in the Wall Street Journal, Kiplinger Personal Finance, Fox Business, and Daily Finance.


  1. I hate paying taxes. I hate that can I look at the amount of taxes I pay annually and see my financial dreams being pushed out years and years. I hate that they are often spent on services I do not have a say in, services that when taken together represent gross over spending by the government. Did I mention I hate taxes?
    Snarkfinance recently posted..The Difference between “Wants” and “Needs”My Profile

  2. It’s never fun to see that much money leave your bank account, but it’s also a good problem to have. Paying more taxes obviously means you have more income, which means you’re doing something right. So keep up the good work!
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  3. We get a lot of great stuff from our Canadian government so I don’t mind the deductions from my pay cheques but I had to go through an nasty audit about 7 years back (big mess thanks to my ex-husband) and had to write a cheque that I really didn’t owe for over $1,000. They also kept my tax return (about $2,000) that year. I am still angry about the entire thing but not at the nice people at Revenue Canada who were just doing their jobs.

    It left me wondering if their is such a thing as karma and after all these years I am beginning to think that it doesn’t exist.
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  4. I use to hate paying taxes but then I got to the point where I just said the more taxes I am paying the more I am making so bring on the taxes. NO ONE LIKES paying them but I just have to find the positives out of the situation. $3500 check is a lot of loot. And I feel you with the 11,000 payment online. I had to do the same thing for about 10k and I just kept staring at the computer like it was going to do it for me. Maybe I was hoping it would have restarted so to give me a minute to rethink.
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  5. In general, I don’t mind paying taxes, particularly our property taxes because I feel they’re a great value for what we pay. But for income taxes, I have extra withholdings taken out of my paycheck to cover the taxes we pay on our rental income. The first year I didn’t and we had to write a check, and I was not a fan of that punch to the gut, so now we do it this way and I mind it less.
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  6. I’m not a fan of taxes at all. UGH!
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  7. I don’t think anybody likes paying taxes. However, taxes are important! They provide all sorts of important goods and services for people. Of course, they also provide things you probably don’t agree with, but those things will be different from what other people don’t agree with… that’s the nature of a government.

    I tend to discount any extra income by 1/4 (since our marginal rate is 25%), that helps with the pain of loss to taxes.

    If Greg didn’t make any money, the taxes you’d pay on your additional earning would be lower because you’d be in a lower tax category. He’s getting the benefits of the lower rates from his base salary.

    Plus, some years that we pay estimated taxes we end up overpaying and we get some back, and that’s always nice.
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    • I know, I know. I shouldn’t complain. There are a lot of valuable things being financed by taxes!

      I just prefer that they are deducted from my paycheck. Unfortunately, I’m going to have to accept that that isn’t going to happen anymore. I’m just trying to envision the $3500 being scraped off of the top of each freelance writing job I did instead of how many jobs I actually did just to pay taxes.

      I think I may be overpaying as well. We changed Greg’s deductions and he has had quite a bit taken out of his check this year. Couple that with the fact that we’ve gotten a refund the past few years and we’re probably going to get a refund. I don’t necessarily want a refund but I definitely don’t want to owe money!

  8. Not a fan of taxes at all. We unexpectedly had a higher tax bill last year and had to pay in $1,750. This year I’m concerned since I’m making side income and might not be paying enough in quarterly taxes. I also will have a big gain on my stock purchase program….I might open a savings account specifically for taxes pretty soon here.
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  9. I wish we could choose which services we put our tax dollars into. I find that there is so much waste and it disappoints me to see my money going down the drain.
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  10. If I felt like my tax payments weren’t being squandered in so many foolish ways, I wouldn’t mind them. Don’t forget as well all of the taxes that are hidden everywhere else: gasoline, phone bills, etc.
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  11. My partner recently had to pay taxes and I can commiserate. It was a huge chunk of cash that otherwise he would have had taken off his paycheques but wasn’t. It was sad to kiss that money goodbye!
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  12. Paying taxes on freelance income is definitely tougher than paying taxes on a full time job! I don’t even look at my taxes withheld from my full time, but when I have to deliberately set aside 30% of everything I make for taxes from my freelance income, I sometimes feel like the whole thing is a futile endeavour!

    Fortunately, I’m a big fan of free health care, fire fighters, snow plows and garbage collection, so I’m happy to pay my fair share.
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  13. Well, the US is a pay as you go system, so you really don’t have much choice in how you pay your taxes. The average person would probably much rather pay in installment rather than a lump sum since it “hurts” less.

    If you want to talk about the pain of paying taxes you should talk to my dad… he wrote the single largest check I have ever seen in my life. It made my knees buckle it was so big. I think the worst part was knowing when he wrote that check it was on money that had been taxed at least one time before that.

  14. Taxes are no fun, but sometimes it might be worth paying for an accountant to see what they can do to lower your tax liability. I am lucky that I used to work for a CPA firm and have some awesome contacts that help me out.
    Lance @ Money Life and More recently posted..How My Credit Card Saved Me Over $250My Profile

    • Unfortunately, I’ve already looked into it. There are quite a few new deductions that I can take due to the fact that I’m self-employed and work in a home office. I am probably paying a little more than I need to but I decided to go that route so that I don’t owe. After I see how this year went, I’ll probably be able to adjust.

  15. The joys of freelancing. I’m still trying to figure out the taxes, but I had to write big check too recently. Le sigh.

  16. Thanks for reminding me, we need to send ours out this week as well! I have been avoiding figuring it out because it just hurts so much to write that check. I know it’s good, on one hand, because it shows how much money you made…but it’s still a good chunk of money. That said, it is what it is and I like being able to drive on roads and such so I keep doing it. :)
    John S @ Frugal Rules recently posted..Things I Would Never Do: Raid My 401k to Buy PropertyMy Profile

  17. Wowzers, do you pay in quarterly installments? I think taxes are a necessary evil in order to fund social services, public works, etc. Personally, I prefer paying in one lump sum so that I only get annoyed once a year verses multiple times a year, lol.

  18. Wow, that’s quite a bit to pay for one quarter! I guess the lump sum would hurt a bit more to most people. Someone who receives a paycheck gets the taxes taken out before they even see the check, and half the time no one really pays attention to how much they have deducted. They just see what they bring home.
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  19. So true that paying taxes in a lump sum hurts much more than having it deducted from your paycheck. Great analogy with financing a car. I guess that is the reason some people I know intentionally have MORE taxes withheld from their paycheck so they get a big tax refund. Technically they’re giving the government a interest free loan, but mentally it makes them feel better that they’re getting a lot of money (that was theirs to begin with!)
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  20. Perhaps the pain of writing that check is, as you point out, formative–I had a similar experience and it definitely dissuaded me from getting back into debt.

  21. Ouch! That would hurt. $3500 is a lot of money. Maybe you could look into ways to get that lowered. Maybe you should talk to an accountant and see what kind of deductions you might have.
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    • Unfortunately, I am already accounting for the new deductions I’ll be able to take> I’m probably overpaying a little, but not by much.

  22. Ouch, that is a tough lump sum to handle, I would be upset, too. What you said about monthly taxes vs. quarterly totally makes sense. But on the positive side, it sounds like you had a great quarter!
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  23. Oof, that’s definitely a lot to pay all at once. That sucks, but at least you are being responsible so that you don’t have to end up owing later! I think it’s worse to have to write out a check to pay them, since you don’t really have to think about it coming out of your paycheck. It can be discouraging to see my gross vs my net pay though.
    I totally agree with your statement about paying cash for the full impact of your spending, too. Probably also why I’m cheap :)
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    • Yes, if I don’t pay enough throughout the year then I have to pay a penalty. I don’t want to compound the problem by doing that!

  24. I think you’re right that it feels easier to pay in installments that don’t seem as bad. Maybe along the same psychological lines of paying with cash vs. swiping a credit card.

    I guess one good thing about having it taken out of the paycheck is you can’t miss what you never had, so less chance of not accounting for taxes in the budget.
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  25. Last year I didn’t make enough to have to pay quarterly (barely). This year it looks like I will unless I increase my withholdings at my day job, which I plan to do before the end of summer.

    I run all my freelance work through my LLC, and I only pay myself 2/3 of what I make. The other 1/3 is in the business savings account. It’s easier for me if it’s never been “mine” in the first place.
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    • That is exactly how I do it. Everything I make gets paid into the LLC then I pay myself a salary. The money was set aside and didn’t really feel like mine UNTIL I actually had to write the check for it. Then it felt like my money all of the sudden.

      Anyway, that’s great that you’ll have to pay this year…..that means you’re making more moolah! Always a good thing.

  26. Paying taxes is never any fun. It helps if you know that the money is going to a good cause or to help pay a benefit but writing the check is still hard.
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  27. I hear you, Holly! When my employer took taxes from my paycheck, I didn’t necessarily enjoy paying them but I didn’t personally write the check. It was done for me, so it just hurt less. I try hard to avoid getting a refund or paying in at tax time, but I will confess – it always hurts more to have to cut another check. On course, paying taxes means you’re making moolah too. :)
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  28. I once heard heard Mark Cuban say he loved paying taxes because the more he paid the more he earned. I feel your pain of paying it out of pocket, it can be a bit of sticker shock for people doing business for themselves. You get hit with the self-employment tax that normally your employer pays. So it’s a hard check to write especially if you aren’t planning on it.
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  29. I can see what you mean.

    If I got all my pay up front, had a chance to hold onto it (or at least look at a bigger number in my online bank account), then had to send it off, I’d cringe a little too. I wonder what would happen if everyone had to pay their taxes in cash at the end of each quarter.

    Maybe a better question is, what would we do if we had to pay each individual federal department or agency? So of your $3500, you’d send $1750 to the Department of Defense, $150 to the State Department, $100 to national parks and environmental protection, and so forth. Might make us think differently
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  30. That is a great analogy about the car financing. If you don’t really see the whole amount, then you won’t ever feel the pain of writing the check. I hated writing them when I was running my business, but as you said, I don’t really mind them now. Out of sight, out of mind.
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  31. I used to enjoy tax time when I could get a check back from the IRS. Now just like you I have to pay them several times a year and the checks are not small.
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  32. It’s easy to ignore when it’s taken our of your paycheck every month, but yeah that lump sum can really feel like a huge bite our of your savings, but better now then at the end of the year.
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  33. Have you tried having your husband claim 0 to try to reduce your estimated tax payments? or are you already doing that?

    My brother’s wife works for a Chinese company not registered in the US (Sina-Weibo) so it’s like she’s self employed. So he makes sure he claims as little as he can to reduce her quarterly payments.

  34. I’ve been lucky (or unlucky) enough not to have to pay any taxes (aside from the usual deductions in paycheque) yet because my income is lower but once I do, I can’t imagine that it will be fun. On a positive note, it sounds like you had a great quarter Holly! :)
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  35. Self employment tax is certainly a downside of not working for the man. At least you saved enough to pay them. Many people don’t understand they need to save part of their non-W2 pay, and then can’t pay when April 15th rolls around.
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  36. I’ve never had to pay quarterly taxes before, but I can imagine how bad it has to hurt. Do you guys have a separate account that you have to save for taxes? I would think that I’d have one where I put 40 cents of every dollar I make into it so that it wouldn’t feel as bad when I finally had to pay it.
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    • Yes. Everything I earn as a freelancer gets paid into my LLC. I pay myself a salary from it and I set back money for taxes. It didn’t bother me to set the money aside…but it hurt to write the check and watch my account balance go down.

  37. I loved when I worked in the UK because being employed full time the retention was exact to $20 and for that amount there was no need to write a check, they just rolled it up to the next year. Now in France there is a new law and the government takes three installments before the taxes are due to avoid people being faced with a big payment, and I don’t like paying the money in advance. At least it is all automated so no writing painful checks!

  38. Taxes SUCK. I’m not looking forward to doing them now that I’m into freelancing stuff…I can already predict paying in…BOOOO.
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  39. I’ve never done self-employment taxes before. Somehow it seems less painful (in my head) when the money comes out each month. But either way taxes are no fun.
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  40. I much prefer taxes taken out of each check… it hurts less. Then again, the fact that you have to pay all that in taxes means you are doing well!
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  41. I’m not a fan of paying taxes either, but I realize the benefits, so it’s tolerable. The more you pay the more you’re earning, so kudos!
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  42. I’m with you- taxes are (begrudgingly) necessary, but working for yourself sure puts things into perspective when you cut that check to the IRS yearly, quarterly, or however you have it set up. Last April was not a good time for me, either. It just makes you feel sick to watch all that cash you worked hard to earn just sail away to the man…

  43. Great post Holly, I am sorry you had to pay the $3500 to the tax man. This brings up a great point though. If everyone had to write a check for their tax liability, they would be more connected to how much they actually pay and therefore less apathetic about the spending problem in Washington. As you can see it is much more painful to write a check to pay taxes rather than have the money deducted from your check. The tax collector has become our employers, and you can bet that is by design.
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    • Completely agree Jim. Definitely a smart way to design. Why trust us to pay them later? Why not go ahead and take it out of each check we get? That way we never ‘miss’ it.

      With that said, I love taxes. But I hate our current tax structure. It’s just not the most fair or equitable.

      Am I going to take advantage of current loop holes? Yes.
      Do I wish that the loop holes were removed? Yes.
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  44. Income taxes are absurd, especially the rates.

    But even beyond the rates or squabbling about that aspect in a political context; the very fact the government think they have the right to take a % of anything you ever earn… is just absurd.

    Things like road tax… fair enough; we all use the roads, they’re a public expense… but just deciding that they’re going to take a hefty chunk of your earnings because ‘they feel like it’ and justify it on the grounds of ‘we’re all paying in to the pot’, the pot which they mostly use to invade and bomb small countries…

    It’s just absurd. We’re living in a very bizarre set-up that’s for sure.
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  46. I would much rather have it that way!!! =)


  1. [...] this is my gross income, please remember that I haven’t handed a chunk over to Uncle Sam quite yet.   It is, however, the grand total of my income after expenses.  Thankfully, my [...]

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