Tax season officially ended and many people who thought they were going to get a refund actually owed. This was the case for Rich, who ended up owing a good chunk of change this year. This was the first time he’s ever had to pay the IRS. Marcus, on the other hand, got some money back and thinks it’ll be the last year he gets a refund. Thanks be to the merciful tax gods!
That being said, this week’s episode is all about tax planning throughout the year and how you can take the necessary steps to make sure all your money is in order before tax season arrives. In this episode the guys discuss their tax return expectations, making more and earning your way into a higher tax bracket, filing with a CPA vs. filing online yourself, and how to set the foundation for personal finance success all year long.
Show Highlights:
- The impact of waiting till last minute to file taxes
- Expecting a refund versus preparing to owe taxes
- Working on 1099 contracts when no taxes are taken out for you
- Why succeeding at your career can push you into a higher tax bracket
- The pros of hiring a CPA instead of filing your taxes yourself
- Establishing good monetary habits throughout the year not just at tax season
Mentioned on This Week’s Show
- Small Business Finance for the Busy Entrepreneur by Sylvia Inks @SMIFinancial
- Your Tax Season Questions Answered ft. Rianka Dorsainvil, CFP – PB119
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Announcements
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- Brown Ambition Podcast – Ep. 169 — Finding Your Perfect Retirement Number with Paychecks & Balance’s Marcus Garrett: Paychecks & Balance’s Marcus Garrett cohosts this week’s show, and he shares how he found his perfect retirement number (Hint: It’s actually not as high as you might think!).
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I’m someone with an irregular income and tax time has definitely had some surprises for me in the past. How I’ve overcome most of the surprises: I made an Excel file that allows me to put in my income into a tax table (taking into acccout whatever I’m saving in pre-tax retirement and HSA accounts) and get an idea of my total tax burden and relate it back to a percentage of total income. I can see what that number is at any time…which is a worst case scenario since it does not take into account standard deduction or other adjustments that are typically made at tax time. Each time I get a check, I save the difference between what came out for taxes and the relative % I think I might be taxed for into a online savings account. That way if I am hit with an owe come Apr, at least I have the money AND it’s been making 2% for me all year long. And of course since it’s just an Excel file I can check back in periodically in case I have the good problem of making more than I expected so I can adjust accordingly.
Was the movie Harlem Nights?
It was the movie ‘Trippin’ (1999)