My (direct) flight home was canceled, so I had to fly to Denver, hang out there, and then my flight from Denver to San Francisco was delayed. Super good times, with 24+ hours traveling.
I'm back, and fully in the swing of parenting this weekend. Both boys had semi finals for soccer, plus basketball. One team went on to the finals, but we lost in a very close match today. We had to go to ice cream to dull the pain of the loss. ;-)
It was a very long month (I know, the irony, given that February is the shortest ;-)). We did a decent job with our budget, I basically got in no exercise with my trips & being ill early on, and we found out that we owe a tremendous amount (almost $40K) in taxes. More on that. We have the maximum account deducted from our paychecks, but this comes down to the distribution of our income, and a standard tax rate for stock. Net/net, our stock is a bigger portion of our pay than expected, and our employer is only allowed to withhold 25%. Our tax rate is closer to 40%. So, the $40K is the difference between that.
To make matters worse, we haven't sold any of the stock, so we've yet to see the benefit of it - just the pain. ;-) We were planning to save it for a potential house downpayment. With the news about the taxes, and the reality that we have to have a great deal of additional money withheld every month . . well, we're kind of back to the drawing board about buying a house.
In non-financial news, we lost my grandmother, which has been very difficult emotionally.
March will involve rebuilding our 2015 financial plan, adjusting our paychecks for next year's taxes, and generally working through various life scenarios.
And, I MUST get in shape! Too many trips, too many cocktails, not enough exercise. My clothes are tight.
And, how about you? I'll do a few goal posts to wrap up February, but hope everyone had a great month!
Wow - that is a travel and tax nightmare. Not sure how the comp/stock splits between you and your husband - but would you changing to a different job that is less stressful and that maybe pays less (or just the cash piece of what you make) help the situation? Does it make sense to sell one of the other places before you buy in CA? Good luck with this - I know the tax issues can be tricky/messy. I hope you don't have to travel for a while too! I get to be home next week and really appreciate the break from traveling for work.
ReplyDeleteWe've thought about all of your questions, for sure. :-) Our Washington house is now net cash flow positive, so we'll likely not sell it. For the work stuff, definitely an option, but the longer i can hold out, the better it is for us financially. This is not scalable in the long-term, but I have a few other big chunks of money coming, so it's important for me to stay.
DeleteI can't imagine having that huge of a tax liability at tax time. I've never had stock options so I don't understand any of the tax implications but it would seem that others at your company are having the same issues. Right? Have you reevaluated taking a less stressful job? Or do you have an exit plan at this point? Hope March is better for you.
ReplyDeleteMy peers have also said the same thing happened to them, but it's unusual for two people (M & I work for the same company) to have the issue doubled, like it is for us. But, yes, they've all dealt with the tax on stock issue. Definitely considering options - I've built a draft exit plan, but it's not immediate. Likely exit that I'm aiming for is 2018. From there, the boys will be out of elementary school, which frees us up to look in a broader area for housing. It also means that I'll have 4.5 years in at this company, and hopefully we'll have enough saved to buy a house.
DeleteI think Feb sucketh for just about everyone lol. Glad you made it back safely and are back to normal family life. The taxes thing is certainly out of left field - so difficult to plan when you are faced with that. I guess the only good thing is that you earn very good incomes and can overcome it. Do you really feel San Francisco is your permanent home? My family in Oregon are having a really difficult time buying a house because the market there is so hot - maybe time to sell the vacation house? Spring is best for that kind of thing. Tough decisions.
ReplyDeleteOh, the tax thing is a nightmare. I had a worst case scenario number in mind, but it was $20K. ;-) When the number was double that, I about died. Yes, the accountant was also really shocked, but it comes with the territory having two of us working at the same company, with the same compensation challenges, and the stock issue. Wish our employer would be more upfront about the taxation of the stock.
DeleteWe'd potentially be open to selling the Oregon house, but it's one of our only tax breaks (mortgage interest) & the interest rate is below 3%. The market on the coast is not great, so since we're not in a place to buy in California, it doesn't make sense to sell until it's either at a price we're comfortable with, or we need to.
As for the San Francisco question - great question. :-) I LOVE the weather, love the area. Hate the cost of living & the traffic. I think it will likely be one of our homes, in the longer term. Short term, we're not interested in putting the kids through another move unless it's absolutely unavoidable.
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