Thursday, March 22, 2007

Joint Life, Separate Taxes

I live with my boyfriend. We live our lives together in a lot of ways, and a lot of our choices affect each other. Our lives are merged financially to some extent: we have to coordinate to write the rent checks. He pays the bills for electricity and internet service; I pay the Netflix bill; we have to check in regularly and make sure everyone (including our third roommate) is paying his or her fair share. We go grocery shopping together, but also seperately; we take taxis together; we go to the movies together; all these things have financial ramifications and require us to work out a sort of policy on our financial interactions.

But this is one I don't think I'd anticipated: taxes. We file separately, of course, but while my taxes are easy-peasy (one W-2, a couple of 1099s, free e-file, done), K's taxes are a huge pain in the ass. He's a freelancer, and so he's got way more paperwork than I do, an entirely different vocabulary in which to discuss his finances (technically, he's a "sole proprietorship"), the self-employment tax, quarterly estimates, and the absence of witholding to deal with. Complicated. Also—let us be frank—he is just less organized than I am about these sorts of things.

So, while I'd filed my taxes and received my return by the beginning of February, K has yet to begin working on his. For probably a month and a half, I have been bugging him about this, making myself a nuisance with my anxiety.

I'm fully aware that I've been being intrusive, and I hate bugging him, but his inaction on stuff like this just brings up this tremendous, inchaote fear in me. I'm afraid that he will miss the filing deadline, and afraid that he will end up owing the government $10,000 that he doesn't have. It's some big, instinctive, disorder thing. It wigs me out.

Well, thanks to the kind help of another New York freelancer, I found an accountant who could help, and she and K have an appointment tomorrow, and I get to sigh a big sigh of relief. After I sigh the big sigh of relief, though, I have to consider whether I'd be so freaked out about the filing thing if we didn't live together—how much more intertwined does it make our lives feel? I'm thinking kind of a lot.

And I guess it's real that money is a big part of a relationship when you start living your lives together. You have to be able to set and pusue goals together, and make joint decisions without killing each other, and that kind of thing. But because we're not married, or planning to get married, it's a different deal—there's a sense that we're separate in our finances because we're separate in our lives, regardless of the fact that we buy groceries and housewares together and cook together and share chores and all the rest of it. I don't feel like it's okay for me to ask him to change the way he conducts his financial life unless it actively affects me (i.e., the fact that he hadn't done his taxes was going to give me a heart attack)—and because our futures are so up in the air, I can't really say that his future affects me.

It's an odd position to be in. I really don't have any conclusions about it—I'm just thinking out loud—but it's interesting that it manifests itself in money, that you can see it there.


Starving Artist said...

Interesting problem. Note, however, that your BF has survived this long, and it is a bit unfair of you to lay your anxiety on him. You have very limited financial involvement with him, and shouldn't be expected to have any further involvment until you get married. Doing things like finding him a tax person just makes him dependent on you for these decisions. You go from a BF/GF relationship to a mother/son relationship, which is SO unsexy. Let him live, get his own taxes done, and yes, fail if it comes to that. To have a truly equal relationship, you have to be secure in his ability to solve his financial problems, not secure in your ability to solve his financial problems.

English Major said...

You've definitely got a point, starving artist. I'm just not sure what to do about the anxiety if I don't do anything, you know? It's a weird issue: for awhile he was reminding me to do something that I needed to do to take care of myself (not a financial issue, and not something I want to disclose here), and I was sort of okay with that--it was a little irritating, but I knew (and know) that it was an expression of concern for me--but it also came from his own reaction to the way in which that issue changed our interaction.

This is a complicated thing. I'm really not sure how I feel about the way I handled this situation. Thanks for your feedback.

Millionaire Artist said...

Great observations, I am in a similar situation with my boyfriend - specifically, how to navigate common goals if we see a long term commitment but not a "legal" commitment? Maybe it's better - as described, his mother is an IRS agent. Yikes! (Two more years, just two more years until she retires..!)

mOOm said...

If he's already doing estimated tax payments then you have the safe harbor provision that means you are OK penalty wise as long as you pay as much tax as last year. Then all you need to do is submit an extension notice on tax day. Maybe he'd end up paying some interest if he owed some extra tax in the worst case. It's probably not as scary as you think.

JJ said...

I have a friend and a relative who have respectively ended up owing $15,000 and $21,000 in back taxes without the money to cover it. They were both freelancing without talking to an accountant, and vastly miscalculated the amount to hold out of their paychecks. Your suggestion was an excellent one and even if your boyfriend had done a better job with the math than my friend did with his I have become convinced that every self-employed person needs periodic check-ups with an accountant.