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Tax & Business Strategy

Money in Motion: Smart After-Tax Moves and Financial Decisions

Filing your return isn’t the finish line. In this Cultural Coins Live conversation, host Eugenie George talks smart after-tax moves with three pros: accredited financial counselor Carl Windom of Diversified Resource Network, certified financial coach Leah Davis of Leah Davis Coaching and financial advisor Al Faber. They cover what to do if you haven’t filed, how to use a refund, how to protect yourself from tax scams and why you don’t have to face the IRS alone.

Key takeaways

  • Always file, even if you can’t pay. Not filing is usually the costliest mistake.
  • Use a tax refund to build an emergency fund, pay down debt or invest in yourself.
  • Try to pay yourself at least as much as you pay in taxes.
  • Guard your personal information. Tax season is peak season for scams.
  • The IRS offers payment plans and disaster relief, and a trusted pro can help.

Step one: file, every year

Carl saw it firsthand while working with small businesses during COVID: many people simply don’t file. That’s the worst choice, he says. If you can’t file on time, file for an extension. Penalties can still apply, but skipping your return entirely costs the most. Business owners also need to stay on top of quarterly payments.

Al adds that taxes are one of the few debts you usually can’t erase, even in bankruptcy. If you got a surprise this year, like a big refund or a big bill, now is the time to review what happened and plan ahead. That way, next year holds no surprises.

When taxes feel overwhelming

Leah shares that she once owed the IRS and avoided dealing with it, which only made things worse. Many of the women she coaches freeze when money feels scary. Her advice is to support yourself first. Consider setting aside part of a refund for what she calls a peace fund, something that helps you feel grounded enough to act. You’re also not alone. Advisors, tax pros, coaches and local nonprofits can help you through it.

Get organized before you file

Carl’s checklist starts with records. Business owners need a bookkeeping system, financial statements and receipts. Gig workers and contractors should collect every 1099. W-2 employees should gather every W-2. Your forms should arrive by January 31. Report your income accurately, because the IRS gets copies of these forms too. Underreporting can lead to an audit and extra charges.

Smart moves for your tax refund

A refund is a chance to build a cushion. Carl encourages building an emergency fund first, then saving toward a goal like school or a business. Al asks clients a simple question: who do you care about more, Uncle Sam or yourself? If it’s you, try to save at least as much as you pay in taxes. Leah adds a third option: invest in yourself through a certification or new skills that can raise your income over time.

Should you pay off debt or save first? The panel agrees there’s no one answer. It depends on your situation and your values, which is where a pro can help you weigh the tradeoffs.

Protect yourself from tax scams

  • Never share your Social Security number, birth date or address by phone, email or text with someone you don’t know.
  • Check where an email link really goes before you click it.
  • If someone calls claiming to be from the IRS, hang up and call back using a number from the official IRS website.
  • Urgency is a red flag. Pause and have a trusted person look before you respond.

The IRS can be more reasonable than you think

If you owe and can’t pay all at once, the IRS offers installment agreements, and starting one beats paying nothing. After a declared natural disaster, the IRS often extends deadlines for people in the affected area, so check the IRS website if that applies to you. And keep good records so you can claim every deduction you’re entitled to.

Most of all, work with someone qualified. Look for licenses and credentials, interview a few people and choose someone whose values match yours. As Carl puts it, trust but verify. A financial team with a tax pro on it can keep you ahead of next year’s return.

Want more conversations like this? Watch more Cultural Coins episodes.

This article is for education only and isn’t tax or financial advice. Tax rules and deadlines change, so talk with a qualified tax professional about your situation before making decisions.

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