Tax season is always an interesting time in people\u2019s financial lives.\u00a0There\u2019s nothing like reviewing how much you spent, how much you earned, and how much you did or didn\u2019t save, to stir things up in your relationship with money.<\/p>\n
Read on to learn about the nine reasons to file your taxes today and to hear the gory details of my tax prep experience this year.<\/p>\n
It takes time to work on your taxes, so this year I blocked out an entire day to work on them \u2013 no clients, no husband, no phone calls, and no to-do list. I surrounded myself with my laptop, files, bank statements, notebook, and the Money Minder \u2013 my primary money management tool.<\/p>\n
I dressed in comfortable clothes, ate breakfast, put some of my favorite music on and poured myself a pot of tea \u2013\u00a0a ritual<\/i>. I looked forward to my acupuncture appointment and dinner with a friend the next day \u2013\u00a0a reward<\/i>.\u00a0 If examining your money makes you feel anxious, then be sure to reengage the basics of self-care \u2013 eight hours of sleep, eating well, drinking plenty of water, and getting regular fresh air and exercise.\u00a0If a consistent routine of self-care does not counter balance your financial irritability, consider inviting in a financial confidant or accountability partner.\u00a0You don\u2019t have to do this alone!<\/p>\nIdentify and Stop Leaks<\/b><\/h3>\n
In the process of preparing my finances for my CPA, I discovered and stopped a few expensive leaks with my cable bills, hot-spot wireless service, and credit card processing fees. Focusing on my taxes and annual totals forced me see the thousands of dollars I\u2019m spending per year in fees on my business.<\/p>\n
Tax time is a great opportunity for you to get organized.\u00a0If you haven\u2019t already, now is the perfect opportunity to move all of your 2013 paperwork into a marked binder, box or envelope.\u00a0 If you\u2019ve been procrastinating on selling unwanted items of value or filing for medical reimbursements, now is the time to do it.\u00a0Move that never worn collection of designer heels to where it should be, in the hands of high-paying customers on eBay. Having more space is just one of the benefits of being financially savvy!<\/p>\n
After reviewing my records, I took a closer look at my action plan \u2013 my list of financial housekeeping tasks.\u00a0I\u00a0finally<\/i>\u00a0got closure on a few outstanding items that were weighing me down.\u00a0I found an unopened envelope of my car registration. I discovered that I had a class credit at a local dance studio, and I finally responded to repair inquiry from last year that resulted in a $70 credit. Following up and resolving these quandaries relieved some stress.<\/p>\nLook at the Big Picture<\/b><\/h3>\n
My husband and I decided to track some unknown expenses, also known as \u201cmoney fog\u201d. Through the process of working on my taxes, I saw I had $1,112 of money fog in the second half of 2013. That was an average of $185 a month \u2013 it adds up! We asked ourselves what\u2019s working, not working, and what changes do we need to make to prevent losing<\/i> this much money in the future. By the way, I recommend completing your 2014 annual plan and net worth assessment by April 15 at the latest.<\/p>\nPlan Ahead<\/b><\/h3>\n
Years ago when I was newly self-employed, I actually mailed tax payments to the IRS and State every month \u2013 that\u2019s what worked best for me at the time.\u00a0Now, I have a tax savings account set up with monthly automatic savings.\u00a0My income increased last summer and my Q3 estimated tax payment was more than double the previous one.\u00a0I actually prefer paying my taxes throughout the year to owing a lump sum every April. \u00a0Remember you have choices \u2013 one of the greatest luxuries in life!<\/p>\n
Good news.\u00a0We\u2019re getting a refund \u2014 something I call\u00a0sudden money<\/i>.\u00a0Sudden money includes tax refunds, bonuses, reimbursements (small or significant), other refunds, inheritances, and periodic income such as book royalties, sold personal goods, etc. And no, payday is not a form of sudden money.\u00a0We literally\u00a0found money<\/i>\u00a0and increased our inflow by identifying and stopping leaks, inquiring about credits, and filing for reimbursements.<\/p>\nSatisfy Needs and Wants<\/b><\/h3>\n
As with any form of sudden money, I suggest considering the\u00a0Rule of Thirds<\/i>. Pause and think about the possibility of putting a third of your tax refund towards the past, a third towards your present needs and wants, and a third towards your future.\u00a0Absolutely treat yourself and be mindful, but a core value of financial well-being is responsibility.<\/p>\n
It\u2019s essential to stay connected to your whole financial picture.\u00a0The past can include student loans, mortgages, car payments, personal loans and credit card debt. Your future can include a travel savings account, periodic expenses savings account, safety net, retirement account and other investments. When sudden money comes in, use the Rule of Thirds to take a step back and make a sound decision.<\/p>\n
Set yourself up for success today and remember early is good \u2013 as soon as you file your taxes, you will have clarity, a refreshed action plan, more counter space, and more money.<\/p>\n","protected":false},"excerpt":{"rendered":"
Tax season is always an interesting time in people\u2019s financial lives.\u00a0There\u2019s nothing like reviewing how much you spent, how much you earned, and how much you did or didn\u2019t save, to stir things up in your relationship with money. Read on to learn about the nine reasons to file your taxes today and to hear […]<\/p>\n","protected":false},"author":1123,"featured_media":34393,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-6080","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"\n