Death by Taxes: Getting a Handle on Your Finances Before Your Finances Handle You

Death by Taxes: Getting a Handle on Your Finances Before Your Finances Handle You

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According to CNN, single people with no kids pay an average of three times more in taxes than married couples with kids. This is because the married couple is able to claim a variety of deductions at lower income points than a single person but that’s of little comfort when you’re bouncing your bank’s “direct deposit advance” against a payday loan every month just to keep your lights on.

Unfortunately, even though experts agree that kids need to be taught about personal finance at an early age, most of us didn’t get a solid education in personal finance before we were turned out into the world. We watched our parents insist that everything was fine and spent whatever allowance we could get on whatever made us the happiest in the moment. Then we got kicked out into the real world and…wait, what? The toilet paper doesn’t just magically appear?

What feels even worse, when you find yourself in a dire financial situation (or when you’re working like crazy to keep your situation from bottoming out) are the volumes of articles out there that insist that “taking control of your finances is easy! Just follow these quick tips!”

As a friend of mine said a few weeks ago “sure, the tip to go to fewer movies is great…unless you already don’t go to any movies because you can’t afford it!”

This isn’t to say that there aren’t a bunch of great resources out there that you can use to learn about how finance works, how to create a budget, how to follow a budget, how to survive on pennies a day and how to keep yourself out of jail if the IRS comes knocking. If you know how to find them, there is a ton of great information out there. The problem isn’t finding the information. The problem is understanding the information and knowing how to apply it to your life.

This is why, when you find yourself in a money spiral, the very best thing you can do to help yourself (in spite of what your ego might say) is to ask for help. Yes, your ego will be bruised but seeking help from a personal finance expert is the absolute best thing that you can do to get yourself on track.

There are a lot of reasons that asking a human to help you with your money troubles is better than trying to sort things out for yourself using anonymous informational resources:

  1. Articles don’t know you and, even those that are published locally, won’t know basic things like the cost of living in your area, the average income, your local tax codes, etc.
  2. Books are designed to appeal to the widest audience possible. A person will be able to look at your actual situation and apply it accordingly. For example, during tax time, working with an accountant or tax prep expert can be incredibly helpful in making sure that you get the most deductions possible.
  3. If you find yourself under water on your tax bills and the IRS is threatening action, it’s much better to work with the agents at companies that specialize in tax settlement cases than it is to try and go it alone. A human can walk you through the process and make sure that your efforts to fix the situation don’t actually wind up hurting you (which happens a lot with IRS cases).
  4. People follow up. Articles and books don’t require regular meetings and aren’t going to check in to see how you’re doing. Your advisor will remind you to make your quarterly estimated income payments and meet with you regularly to assess how your financial recovery is going. It’s easier to stay on track when you have someone checking in.

Remember: people who help others with their finances have seen it all. You are not likely to shock them. More importantly, they aren’t there to judge you. Financial and tax advisors are there to help you get back on and stay on track so that you don’t find yourself in the same situation in the future.

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Categories: Tax Tips

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