Updated: Mar 22
Income Tax. My income tax return. Your return. Each and every one of us is a taxpayer, which makes it funny. Notice that normally April 15 (or the nearest Monday) is Tax Day.
This year, because of Covid, it's been pushed back to May 17. How does that impact you?
You can find a ton of details about taxes at Wikipedia and Investopedia among other places. I’ve added those two to today’s show notes.
The impact on you is far less than you probably think and here's why. Personal income tax is something that we all have to pay if we are making money. Or, to look at it another way, if you have a tax bill, view yourself as lucky. It means that you are making money!
The first thing that most people have in their mind is that money is property, and it sort of is property, so therefore they should not just give that away.
Okay, I get that, but you're not going to get very far in court with it, at least not most courts, so I'd recommend putting your focus on other things.
In the book Joy, co-authored by the Dalai Lama and Bishop Desmond Tutu, we learn of the importance of laughing at things you cannot control. There's something to be said for letting that kind of thing go, to not twist your thinking into ways to make things better, like credits or even a refund, but instead recognizing and realizing the benefits of circulating money.
Personally, I'd love to have a tax bill 100 times as high as I ever have. I'd love it if worldwide income was way higher than it is.
Why? Because that translates into taxes on income being 100 times as high, too!
I'm not even going into federal income tax or state income tax, personal income taxes or business, individual income tax or joint or the different brackets, business expenses, medical expenses and revenues or types of income.
Don't focus on debt. If you want to get out of debt, focus on being out of debt. Always. Even when you don't objectively want to do that. Remember the Growth Mindset.
If you are doing well, then the IRS is going to want some of the action. It's that simple. If you don't want the IRS in your life, then have no action – don’t make money.
Seriously, if you aren't doing well no one would want any of what you've got. Get with the program – think of how you would react!
High income levels, high wages, are a good thing for most households and we'll be back with updates on that in a minute.
Once upon a time and this is my favorite part of the show…our hero Kelly was caught in a difficult thought process about what to do next.
Even though it was a beautiful day outside with the sun streaming in through the windows...
Even though she felt warm in her chair enjoying the surroundings in her room that she had created - the plants - the animals - she still found herself concerned and thinking about a future and an activity that she had to perform.
Doing taxes. Yuck! Here she was letting this cloud the enjoyment of her surroundings.
Then came her epiphany!
She didn't need to be so concerned about what other people thought or what other people did.
They weren't thinking.
They probably weren't even doing.
What she needed to do was think of her taxes as a cost or consequence of doing well. Lots of things can be a type of tax. Gossip and backstabbing are taxes on success. Bad internet is a tax on living remotely. It's all in how we look at things. We have all kinds of resources available, and Kelly had those too.
Changing perspective takes off a lot more pressure than not whether or not you're in the ninth income tax-free state.
Take all the air out of the balloon if you want to use that metaphor and just make it into something small and minor and easy - and get it done.
That's what Kelly did, and that's what you'll do too.
Remember, breaking through means, to use that old phrase, “becoming comfortable with being uncomfortable”.
Let’s get on with how to overcome this kind of problem – what to do and when and how to do it.
How do we put these things together? How will a guest, or me or you address this?
We overcome in a very very easy way which I promise does not involve even thinking about the various income tax systems around the world or the different forms of income we could have.
Don't even get me started on people's refund status unless you want to take a nostalgia ride back to the 2008 financial crisis.
Instead, we make it small.
It's all a small part of what's going on and we make it a small part of what's going on by building a bigger picture - by making that one task a small piece of that big picture rather than it being this big mountain.
How do you eat an elephant? One bite at a time. How's that for health care?
Tasks can be just a small grain of sand in your day - and they can produce pearls. That's how a clam works if you didn't know already.
I'm calling you to take action right now. That’s today’s cost of living.
And I will give you a very specific example of something you can do - coming up after the break.
Hint: it's not changing your filing status or your marital status, but it might increase your earnings.
We’re changing the way we look at things, and
Remember, “THAT’S GOOD”.
Also remember, this is Financial Life Coaching from A Happiness Perspective! Coaching Happiness.
Since a big part of that is your happiness, I’m going to walk down another street, one without rabbit holes. Sometimes I do that by calling on expert guests, but the most important person I could ever call on is you.
And to remind you, everyone listening can head to that voice message link in the show notes to record a voice message for a future podcast!
Anyway, as usual, we wrap up the story with a thing for you to do:
Here's how we're going to do this.
The exercise we're going to complete for this is a deep state secret.
I know this is just a podcast, but if I tell you in detail, I will have to kill you, and you do not want to know how.
The answer involves getting somebody to do the taxes for you, and here's the step-by-step:
1. Get an accountant. That can be a CPA, it can be an enrolled agent if you know what that is (and if you don't know and want to know please ask).
The idea in a nutshell is delegation.
I need a lot of delegation and probably you do too - most people do and most people are really bad without it. I'm not taking anyone down with that - I'm simply raising the standard.
There's a reason only a few people are good at delegation and that is that only a few people actually practice doing it.
I'm considering getting a virtual assistant and figuring out what to offload to him or her.
I want to do the same thing with all of my co-founders and team members - whether they are financial people or not.
2. Let everything else go.
3. Free your mind.
4. Go earn more money.
5. See step one.
Now, as with all exercises, I can tell if you did this. In most of our exercises, whether you did something or not, something I promise you is easy, will be obvious.
But not so with this one.
Don't sweat the details like home office, business and mileage deductions. Don't lose sleep over tax credits or your marginal tax rate. Let a good tax professional take care of that stuff. Just don't let them avoid real deductions to skip the dreaded "red flags". If you can support what you claim, do it and don't worry about it.
It's a great day – AND - we’re just getting started!
We’re gonna bring that into the world of investing.
It’s gonna be a great episode!
But for now, remember,
[Happy Save The Elephant Day]
I mean ALL YOU NEED TO DO IS PRACTICE, AFTER WHICH YOU’LL GET GOOD!
¡Gracias por escuchar! ¡A la prochaine!