Are You Ready for Tax Season?!

Introduction

Welcome back to another episode of Black Girl fly. I'm your girl Tanisha Nicole, and I'm Tashaunda Dixon.

And today we are going to be talking about Denton, Texas taxes, tax season. And so for many folks, this is the time where they just get excited for a refund. Or because it's payment time or upset, right? Because you owe some money. Right. And so I think, you know, Deshawn has always been into taxes and like, I've always been a tax avoider. Do you mean? Like doing your tax avoiding?

No, not tax avoidance people, we're gonna get into that in a minute. But, like avoiding understanding anything.

So, you know, I've recently come to the conclusion that actually, taxes are pretty important. Yeah, it is, you know, glad you got that.

Make the Most of Your Tax Experience

I definitely got that. I mean, I just used to think it was like, something you have to do, and you don't really have a lot of control over it, which is why I was just kind of hands off. You know, I get that. But now I understand there are actually so many different things that you can do to like, you know, make the most of your tax experience that but it is truly like guided by you. Mm hmm. Like, so much power get over what that looks like. And that's why I was into it, actually. So back in the day, I'm Matt, as, you know, audit as I used to be, when I would do a quarterly evaluation for my taxes every year, every year, I would look at my taxes the first quarter, and I'd say, Hey, am I on track for you know, being even because I didn't want to give Uncle Sam an extra loan. And I was thinking about what am I going to do this year? Well, actually, I would say I started that actually in the fourth fourth quarter of the previous year of what am I going to do next year, the next year. And so the reason I'm doing that is because that's the time you do open enrollment. So you have control over like your HSA and flexible accounts and your which all has tax implications. People?

Yeah, so I'm actually looking at the quarter and I'm thinking What about even like having babies, like, anytime your baby's on the tech schedule? I do I do. So let me tell you well, so in each time, I knew that I was pregnant before the next year. So I was like, Okay, this is how I know medical bills will be around here. This is how I'm gonna work with my HSA. Wow, like, wow, yeah, even Okay. Turman, like which health plan I was going to do, because I am relatively healthy. But when I have babies, I, you know, it's a lot more doctor's visits and whatnot. All that plays into it.

Yeah. So what she's alluding to folks is like, all of that stuff has implications on your taxes, and can impact that amount that you either owe at the end, or the money that you're getting back. Right. And so, she knows a lot more about this. And I think to Sean as well, I noticed on his tax situation is a little bit more complicated than mine. But I mean, even as a single person, no kids are the same. It's still right. That's why I'm flagging for the audience. Like, there are still things that you can do to take advantage of some of these, I'm gonna call them opportunities within the tax code.

Well, I want to, I want to say too, it's even more long term and short term than that, like for for young people, one thing that I was very cognizant of, is like, a traditional 401k versus a Roth 401 K, like anybody who ever thinks they're going to retire, it's important for you to understand what that means. Yes. And just so to break that down, like, it's either pay taxes now, or pay taxes later, right? And with the Roth, and the traditional with the traditional, you don't pay taxes at all. So everything that's growing everything that's in there, at the end, it gets taxed, and you're thinking 20 3040 years down the line if you're, you know, younger audience. And so what does that mean? And so, I was doing my homework back in the day so why was so important is because they were like, hey, whether you realize it or not, the United States has the lowest tax brackets been it's ever had in history. And so what does that mean guys?

It's gonna get higher. Yes, what that means for the people in the back Yeah.

So I mean, I'm just saying that to say that no matter your situation, taxes are so important, and it applies to everybody, because everybody gotta pay Uncle Sam, everybody, the only two things guarantee life and guaranteed in life are death and taxes. And so, so I follow somebody on Instagram called the money nista not to be confused with the budget Nice. Okay, the money needs that. And she likes to say that tax season is all year long. But tax filing is, you know, the season we're in right now, the the April timeframe march for those who own businesses, it is a month, it is due a month before your personal returns are due for the most part. And so I think exactly what you were explaining earlier is spot on. Like, these are things you can be actively thinking about throughout the entire year. I think it's good even to have a quarterly assessment of where you are like, that's super critical. Is there anything else that you think folks should be thinking about? Yeah, so

I talked about like the, the last quarter, and then the first quarter. But really what I'm doing throughout that is making sure that my situation hasn't changed, or five, digest something or do something differently, and all those things. And so much so like, even like when I pay my last mortgage payment, well, it doesn't apply now as much because the increase in the standard deduction, but I make sure that I paid my January payment before December 31. Because I knew that it would count for the previous year, and I was trying to squeeze in everything. Right. But and then the checks and balances, and then it's just situation change, you know, isn't going to change. And the hardest thing, though, that I'm experiencing now is finding the right people to help me with it.

Finding the Right Tax Professional

Oh my gosh, oh, my gosh, this has been Oh, I haven't going to say the last five years of filing have been. I'm not gonna say the most excruciating thing ever. But I'm dramatic. So I'm going to say that. But it's just so hard to find good tax professionals who can help you file what you know what I was thinking about this? I think it's because there's so much money to be made. What do you mean, like he's explained? Like, there are people who only open up and do taxes from January to April, and they make buku money? Because everybody has to have their taxes done.

Right? And they do the little littlest thing possible charging $300. Yep, standard fee out. And it's like, you can serve, what 100 people a day if you want. Yeah. So but I think that that has created this gap of real knowledge that you have people out there who looked at the dollars and like, I'm gonna do that right. And they don't have the passion, the dedication, the follow through, like, like tax laws change every year. Yeah, it is not the same as it was last year.

And the code is long your leg, it's just a bunch of levels together. Really annoying.

So but so yeah. So with that, like, I've had the same problem. I've been going through people, and you know, one person, I had one person and he said all the right things, like I was like, Okay, I finally found somebody, he's like, Yes, I specialize and blah, blah, blah, and I can do blah, blah, blah, and I've been in business for blah, blah, blah. And I was like, okay, okay, then he got to my taxes. And I started asking questions, and he can answer any my question. No, he probably got the thing that but no, so that would have been, I would have been okay with him saying I have to look it up. But the thing that made me more angry is he was making up answers that I knew did not sound right. And wow, that's even worse. Yeah, I'm like, You're not even gonna look at ours. You're not even gonna make sure like all those. Yeah.

Oh, Lord. Yeah, I remember. You know, I think the Lord, I'm knocking on table right now on his wood, like, I got audited a couple of years ago. And I was just like, I don't even know what this means. I mean, thankfully, it didn't end up being anything but I'm like, in situations like that decision is talking about, you end up submitting something properly, and you get audited. And that's on you. I was gonna say to you when I was in my 20s, but I had a friend of mine who actually it was tax time. And she went to someone who were for one of her friends referred her she's like one of her friends. Oh, she got her a lot of money back and, and it was the bomb and all this whatnot. And so she went to this person to get her taxes done, and she did her taxes. And she got audited. They called her and she audited and I said let's look at your tax return to make sure you get all the stuff you need. This lady had put businesses she didn't look at it. I mean, because they did the 1040 form is kind of confusing. I'm not gonna lie. It's kind of confusing.

But no, but this lady had put businesses on her account and she was bad. But the sad part was, is she tried to go back to the lady and the lady had closed up shop, the whole office that she went to, like she rented an office, but only from January to April.

Right. And that's the important thing. Because audits they lag about three years. And so you can submit ever, you know, taxes this year, and they not gonna hit you up about it until two to three years from now. What if that person is no longer in business? And I think we can actually go back seven, yes. Legally, seven, legally, but I think they don't like the schedule they're on. They're three years behind. Yeah. So I'm like, so you could get out of it up to seven years back, and you won't, you won't hear about it for a while, I guess. So I'm just like, this text game is not a game, right. And even I think about it more consciously now as a business owner, because lower the the I, I'm paying taxes, that for employees, like I have to pay the business side of the taxes, and I'm paying the employee side of the taxes. So I'm hyper aware of like, this is a lot of money coming out that I have to pay well, not only that, but at all people so so you can owe the credit card company, you're not paying them, you're gonna owe your landlord not paying him, right. They might put a judgment on you or something, but whatever. And I'm not saying you should do this, that you shouldn't do any of that. But but the IRS can get your bank account, they don't get your assets, like they can get anything they want out of you.

I think the IRS Internal Revenue Service is the most effective government agency of all time. Like if you owe them they know about it, and they covered and get they will. They will get it they will get it by any No.

So I had I actually I had forgot. So I forgot to pay. I owed like the state like 200 bucks. And this was like a couple years ago. And I was like, you know, I just like I, I don't I don't check mail. And I don't get stuff in mail. Like I tried to do everything electronically. The IRS does mail. Yes, they do. And so and so I was like, Oh crap, I gotta pay that, like, I got a letter. And next thing I know, my job called me like the next week was like the IRS. And this is letter. Wow, take this one. It was I was like, what? They just didn't do the letter. What? Oh.

Yeah, no, but and then. So what I heard today is apparently they cracking down. And so it used to wait a little while longer like to come at you. But now they're like, We need our money now. Give it to us. I got it for you.

Right, and we don't need it. We don't need to ask you. And I mean, you supply them all your information. Yeah, they have all of your information, so they can find you. I mean, I think the the thing that you said in the beginning of the podcast, like you have so much control. Like that never dawned on me. I used to think like, the IRS already knows how much money I made, like why don't they just tell me how much I owe them. Right? There's rules, there's things so like, even so speaking about even just last year, there were so many differences last year, because they're trying to help us with COVID and all this stuff. So I want so some of the things I got to pick up, take part in was like they increase the dependent care expense. So you could normally get so much prepaid, like you can play into an account to get it tax free. So whatever you pay, it's not you don't get taxed on that dollars, you know, like, was it 5000. And then last year, they went all the way up to 10,000. And so that reduce your taxable income, essentially by an additional amount, or if it was five, they decrease your taxable income by another $5,000. Wow. One other thing that I found that they did last year, that's not normal. It's even if you took the standard deduction, they allowed you to take so many dollars of your charitable contribution. Exactly. Yes. On top of, you know, your standard deduction, which they never do, right. Yeah. So much. Yeah, so much did change on the tax code for pandemic anything else. I'm like, there was a lot of things. Oh, I mean, I had I had a baby. And so I didn't know that like the baby got that 400 $1,400 stimulus.

Yeah, maybe that stimulus if it was born in the year that they're like, Oh, you extra 40. I was like Oh, my Oh, so I was I was having babies. I was saying I needed to have a baby.

Baby. It's not worth $1,400 For me when pampers by now.

More than $1,400 Oh, sure. Oh, sure that I saw the baby today. That thing is heavy. I'm like, Oh, what are they feeding you? Oh my goodness. So yes, I'm sure it's more than $1,400 a month, maybe maybe not that much.

But what else was there? I mean, there were just so many things and it's always changing right? It's always changing. And so just paying attention, because it's not necessarily it's not cut and dry about how much money you made, right? It Right? How much money you made? How many of these loopholes do you know about? Exactly.

That's the thing that's you know about because you could be doing the things and not taking advantage. That's why I am a huge champion of having a professional look at it, I don't believe in the table taxes and h&r block, do it yourself forms, because you don't know. And, and I found so I used to do taxes back in the day, probably like 15 years ago. And I found that people, every time I sat down and did someone's taxes, and they had done their own, I got the more money back and not just a couple of dollars, like because they 1000s of dollars, because they didn't understand the law. Right. And I do have to tell you, though, just to be clear, I stopped learning about taxes. And that's when it was time for me to get out of business because I wasn't keeping up with the annual things because I wasn't keeping track of the changes. And so I'd say that when you're looking for a professional if they're not actively learning, learning about, you know, new tax code and changes that are going on, then you find someone else find someone else, but on the same price. So I definitely agree with that on the same friend though, we cannot be ignorant, right? Like that is not okay to just hand this over to somebody and expect them to be able to figure it all out. Because, you know, there's a lot of things in there. And it will require them asking every single question, right. So there, you need to know a little bit of something something right to bring to the table. And then like Tashaunda said, you're going to have to review the document on the back end. So you need to be able to understand what is there.

And then some things I found this? Well, this is something that I learned in when I was in Primerica where they said that, oh, no, this is Dave Ramsey, sorry. They said that your financial person should be a teacher, they should have a heart of a teacher. And I think that is so true even for, you know, the accounting stuff and the tax stuff too. Like you want to find somebody who's not so arrogant to say I know what you I, it's too complicated for you to learn, right? You want to find somebody who's like, Hey, this is what's going on to help you understand. And you don't have to understand like, we're not talking about complex algebra, or calculus and all that stuff. But it's Can you explain the spirit of what this means? And you can do that in laymen terms, just everyday conversational talk. And if they can't do that, then

Takeaways

I'm gonna find somebody else. Yes. And so basically, what I'm gonna say is we're accepting applications for tax strategies tax professional, so if y'all have any recommendations, please send them our way to a lot of these were our experiences. Yes. So it, so I'm gonna actually say what we're looking for. Because it's important, right? They all have different types of specialties as well, you know, they might not be able to understand all of the tax code, but they may, you know, focus on one area or another. So we're looking for somebody who understands business taxes as both LLC S corp, which are different. And then we also need real estate investing tax person who knows that things that goes into that stuff like the Augusta rule, right? Like that's probably something a lot of people have never heard of, but we need somebody who's going to be thinking about that with our real estate investments, then I would say we also need someone who understands just the general like family stuff, but also just the mix of w two income and, you know, business income. I think that's just super important to understand the relationship between so if y'all know anybody fits that bill, I'm just putting this out Carolina. Yes, yes. And in our state, exactly. So but yeah, that's, I mean, we could literally talk like forever on this topic. But I think since its filing season, we just wanted to drop a few gems and let you guys get to it. Exactly. countdown has begun. So hopefully, y'all are able to be successful in this tax season and let us know how it goes. So until next time, I'm your girl. Tanisha Nicole, and I'm Shawna Dixon and we are a Black Girl Fly