Let's just skip the chit chat and get right down to the details, shall we?
I choose a W2 job that was less than full time and not a lot of money because I thought it was a great opportunity in a difficult-to-break-into field (archives) and that it made me happy. Also, even tho it part time, it still qualified for benefits, including tuition assistance. What could be better? I had a tough to find job in audiovisual preservation that PAID my tuition so I could graduate AND had health insurance. Sure, it was shitty, and it cost $150 a month, but it was still insurance.
I kept a 1099 job even though I was no longer a full time student because it was also in archives, they gave me a raise, and made me responsible for the entire collection. Sure, I could have worked at Starbucks or something, but I thought this was such a great resume builder and it also was flexible enough to fit with my W2 job without me having to work more than 35-40 hours a week.
I pretty much lived month to month and had no savings. I thought it was a good sacrifice for my future career.
In 2005, I had both a W2 and a 1099 and owed no taxes. I made tuition payments. I had no idea how significant that one difference would be.
Since my salary doubled in 2006, that meant that I could move out of the house and get my own apartment. Sure, I had to use all of my savings for the deposits and such, and lived in a two bedroom with three people, but I thought re-gaining my independence and urban lifestyle was worth those sacrifices.
So, to wrap up 2006: I made half of my pre-grad school income for the happy career idea. I sacrificed a lot. I worked two jobs and earned a degree. I did it for happiness.
In 2006, I made around 20,000 big old bucks.
My W2 position was terminated in 2006 because of funding. While looking for a new job (January 2007), I worked a couple of 1099 jobs instead of trying to find something for an undefined amount of time that would also me to go on numerous interviews. I made 1,000 dollars.
Here is how I got fucked:
- No deductions except the standard. Even if you are in school and have a loan, if you don't make a tuition payment, you don't qualify for the education credit.
- Payments in advance are on the 1099 income, NOT your net income. The W2 withholding did not cover those payments.
- 1099 taxes are due to both the federal government and the state you live in. I lived in two states (well, a state and a district) in 2006.
- I owed half of the year's worth of W2 to DC because it wasn't withheld like it should have been.
- Part time residents in Maryland get fucked.
- TWO 1099 advanced payment for 2007-- federal and DC-- totaled 500 dollars, or half of that month's income.
- Getting my taxes done by HR Block cost 250 smackers, because it took so many different forms.
So, until April 2007, I thought I made all the right decisions for 2006. I risked financially in order to gain in life. And I paid for it. Big time. If this is what being poor is all about, may I never be poor again.