Inevitably, once the NFL playoffs hit, individuals, married couples, small business owners, and corporate financial types start hauling out the previous year’s receipts, bank statements, and other tax records.
It’s a sure sign that tax season has arrived: W2s and 1099s and Mortgage Interest statements are crossing in the mail; numbers are getting crunched and then crunched again in hopes of different outcomes; and tax preparers are bracing for the inevitable race to the April 15 finish line, wishing that this year—just for once—their always last-minute clients wouldn’t be quite so last minute this time around.
An interesting wrinkle this year is that the IRS has warned that taxpayers should expect lengthy waits on hold if they call with questions, and that we shouldn’t expect our refunds anytime soon—all due to agency budget cuts that reduced staffing levels and the ability of those left behind to respond in a timely manner. (You’d think with advances in automation and electronic filing, the system would be slicker and more efficient than ever. I guess not, and in the interest of not raising the ire of any IRS agents reading this blog, I’ll just leave it there. Safe to say, customer service does not appear to be a priority.)
A funny thing happens to me each year when I begin purging my files (electronic and physical) of receipts and various other tax records. As I work through the process of categorizing and itemizing, I can’t help but stop and reflect on each item, trying not only to remember what it is or was, and if it’s deductible, but why it was part of my year and what it represented to me, my family, or my business.
- What were my intentions buying said item, or attending an event, or travelling to some networking event or tradeshow? Did I achieve my goals? Did I get my anticipated return on investment of time, energy, and money?
- Did I do enough with my favorite charities? Could I have done more, and what was the result of what I did do?
- Do my receipts for health expenses reflect good things or bad, or simply what can be expected of a man my age with a new wife and a new baby in the house? Were there surprises, and what does my 2014 experience bode for this year?
- Did I put enough away for retirement? Better yet, did I put anything away for retirement?
- Did I make my revenue goals or did I fall short? Am I gaining or losing? If the former, how can I keep it up. If the latter, what can I do differently?
- Where did I go? Who did I entertain?
- Did new business initiatives pay off? If so, did I toe the line on my 2014 plan, or did new opportunities arise throughout the year that reflect unplanned but warranted expenses (or the opposite)?
- Are there patterns here that I can use to plan for 2015 and beyond?
Your tax records can tell you (quite literally) where you spend most of your time and money. They can paint a detailed picture of your life from year to year: what you bought, where you went, how much you earned, how much you put away for retirement, how healthy you were, what charities you donated to, who was dependent on you, and even more. As such, your tax records offer a glimpse at those things you deem most important.
Looking at your receipts and records, what do they reveal about your 2014 priorities? Did your expenditures reflect your values—those things that matter most to you—or do they tell a different story?
Examine your records closely. Think about the year that was vs. the year that could have been or the year you intended.
Are your intentions—what you want to do and get from your life and your work—aligned with your actions, how you actually expend your time and money?
If so, kudos to you. If not, why not? Are there opportunities for you to re-align spending habits and priorities so that next tax season your life’s picture is more in keeping with the one you hoped to paint?
Either way, celebrate your achievements—those planned and those that just happened—and pat yourself on the back for a job well done. Also consider the challenges you, family members, or your business faced, and remember how you responded. Let any lessons learned influence future actions.
Chances are you’ll find that you accomplished much more than you remember or give yourself credit for . . . and, go figure, we all have the IRS to thank for this opportunity to look back before we look ahead. Happy tax season (85 days and counting until April 15,2015).
What did you learn in 2014?
TAX HELP—My sister, Trish Wright, has a new tax business: www.ameritaxca.com. She has owned and operated five “Liberty Taxes” and has now ventured out under her own name. She provides great tax assistance for all levels of business and general consumers, with a special focus on returns for those experiencing change, who might have all sorts of questions, and who want to feel comfortable in the process.