Happy Friday everyone!
I hope you had an opportunity to really think about last weeks post. I intentionally did not go as deep as I would have liked simply because...that's what I'm going to do today. ;)
I left off with some questions to think about. Did any new questions pop up? Were there any other questions that you didn't quite understand or know how to answer? Its okay. There are no right or wrong answers. The questions main agenda was to stir up some realizations for you. Sometimes we find ourselves living in a cycle, year after year, wondering where did our money go? Whether we have a "good" job or not, we face difficulties paying debt, bills, and balancing that with enjoying our lives. Its a never ending cycle (as it seems) that we are constantly worried about money. Now that we are in January, we are getting our taxes prepared A.S.A.P. (if you live in the U.S. you would definitely experience this).
Tax Season is Here!!!!
Many of us will be expecting big refunds. With landlords, debt collectors, bills, etc., breathing down our backs, doesn't it feel good to know that your current "problems" will be answered soon? The landlord will be paid. The phone line will be turned on again. Perhaps, you'll feel relieved for at least the next two months. This was a common scenario that I witnessed when I worked at a franchised tax office in lower Manhattan for 4 years. Men and women would flock to our tiny office to get their taxes done in anticipation of receiving a big refund. Many of those men and women were so anxious that the first question the second after we finalized the return, was "when can I expect my refund?" The general rule in the office was to inform our clients that the refund wait time began the day the IRS and State accepted the return. Most of the time we were able to receive an answer that same day, which meant the wait time would be somewhere between 14 to 21 business days. ****Please check with the IRS and your state government websites for current and accurate e-filed refund wait times*****
For an unlucky handful of clients, the returns would be either rejected due to mismatched information in the system or even worse, the return was accepted but the IRS or state were "holding" the return pending further information needed from the client. Unless we (the tax office) had a power of attorney on behalf of the client, we would not know what the hold up was. If we, at the tax office, could fix the issue at that very moment, then we would. We've had clients stop in every day to check the status of their refunds. When their refund checks or deposits have not been made, there would be a bit of contention. As a supervisor, at the time, I made sure to instruct my staff to work with the clients whenever this happened. We would go over the next steps to figuring out the issue with the client. We instruct them to visit the IRS website and state website to check out the "where's my refund" options. We made sure they were given all the information needed. Unfortunately, some of them did not get their refunds due to student loans, child support, etc.; or worse, they were victims of identity theft. This happened more often than you think (currently, it is still a huge concern). It is unfortunate and sad...especially when I worked with the client myself and I've watched their hopeful mood turn somber or angry. They blame the tax office, myself, the government, etc. They were looking forward to that money because it was the answer to their problems. They had already spent the money in their minds. Now what were they going to do?
For the other clients who received their refunds, I'd see their happiness and relief in getting those refunds. Debts were paid, landlord was paid, etc. All is right with the world when they had money. I would see these clients the following tax year. They were experiencing the same anxiety from the past year. They needed that money and they needed it now. Year after year, it was the same scenario with many of the same clients. A few of them would come back to the office near the end of the same tax season to ask if we could re-examine their returns for any tax credits we might have missed that would generate extra money. You might have laughed or chuckled at that, but it happened. You could see the desperation in their eyes. Unfortunately, we were too good at our job that we made sure their tax returns were prepared correctly the first time. We knew we would see them again in the next tax season, but we hoped their situation would be better.
Why did I share the scenario above? Because its the never ending cycle I talked about in the beginning. Some of these folks where getting tax refunds upwards of $15,000 - IRS and state combined. Wow, right? I was preparing tax returns that had huge refunds and thinking in my head what I would do with that type of money. I would have paid some debt off and saved the rest. In fact, that is exactly the response I'd get when I'd casually asked the client what would they do with their refund. However, when I saw them the following year, they'd explain that the money was spent fast - especially when they did not have an actual bank account. They would have the check cashed for cash or deposited into (untrustworthy) debit card. I'm not going to mention them by name, but if you go to a franchise tax office, you would be offered one of those cards or you might have even seen the advertisements for cards you can have your paycheck direct deposited into. The fees would absolutely be hidden, accumulative and will cost you more than a free checking account. (Did you catch that?) I witnessed this first hand and I wished (at the time) that we could offer more services to our community. More services geared at helping people learn about being financially stable and responsible. However, my wishful thinking had no place in an overcharging tax industry. More on that another time.
Anyway, so where do you find yourself this tax season? Can't wait to get "paid"? Looking forward to catching up on your bills? Those do sound good. How about planning a vacation? Maybe it'll be your very first one ever or in a very long time. Whatever it is that you're looking forward to, I want you to really think about your expectations for this money. How would it make your life easier? What is going to happen when its gone? How would you feel if you're tax return has held up? Lets be realistic about it because thats the only way we'll truly be able to get a handle on this issue.
Feel free to let me know below in the comment section what your thoughts are on today's post.
See you next week!