It’s tax time, again! We are all caught up in the scrabble and scramble of taxes. Sorting and assembling all those papers and numbers for our tax preparers. It’s a time when your actual relationship with money becomes apparent. If you want to see it, that is.
We have all sorts of ways of responding to this ‘opportunity’.
Some people still practice the “put all the receipts in a shopping bag” method, much to the chagrin of their tax person! That’s the extreme end of the spectrum. It’s the total Ostrich strategy. The message is “I’m not looking, not at all!” And, if that’s what you do, then it is going on all year long between you and money. Not just at tax time. In terms of the Scrabble game, you get no points because you don’t even look at the tiles.
Most of us do, however, do some sorting and compiling. The question here then becomes are you actually noticing what is going on as you do that? How much did you make last year? Did you track all the deductible expenses so you could actually take advantage of them? It’s our individual task to get the numbers to the tax preparer.
Taxes are an obligation, and we want our money obligations to be as low as is reasonable. When it comes to taxes, that means taking full advantage of all the allowable deductions. Sometimes it seems silly in the moment. What does the mileage on this trip to a business meeting matter? It matters in terms of money (57.5 cents per mile for 2015) and in terms of your relationship with money. Are you paying attention, are you honoring what you are doing with this stuff you have worked so hard to get? Are you paying attention? Are you keeping the obligation part as low as is reasonable, so that you have more to fund the fun stuff? That’s what it’s really about, isn’t it?
In our Scrabble analogy, if we aren’t taking advantage of all the deductions it would be like not replenishing our tiles before the next hand.
Can you go too far in this? Can it become an obsession? Well, yes, of course it can. Anything can, even Scrabble. 🙂 It’s up to you to know when you have fallen into the other extreme. Do you try to control every aspect or your money? Or maybe you try to control how your partner spends? It’s all very telling. We just have to be willing to see what money is telling us. If you just couldn’t tear yourself away from the Scrabble board you’d know you were in trouble. What would that signal look like for you around money?
I’ve got one more new clue in the Tax Scrabble game. It’s to review your return. In our Scrabble analogy, it’s like looking for misspelled words. No, you can’t figure out the actual taxes. What you can do instead is make sure the right numbers were used. Okay, I know, I’m a recovering accountant. I actually do this. I look at the return and make sure the numbers jive back to the W2, 1099’s, and whatever else I know. And, unfortunately, the truth is that I have often found mistakes. The irony is that finding these mistakes has always saved me money. This is a step no one wants to do, and yet it is very important. Your tax preparer may support you in an audit, but they won’t be paying the additional tax, penalty or interest. You will.
What does winning this game look like to me? It looks like owing or getting back less than $1,000. That means I’ve been using my money effectively, not letting the IRS hold it for me. It means really being clear on what the earnings and deductions are. Taking advantage of all that is allowed. Honoring my money, and being clear on what I’m choosing to do with it, and paying attention to what it’s telling me.
Tax time is a great time to do that. What you learn from last year, can still be applied to this year. Who knows, you may land on a Triple Word Score if you are paying attention!