Better Understand Taxes

Better Understand Taxes

The University of Denver invited a few of us Colorado Financial Planning Association members to speak on a panel. We shared our career journeys and information about our Financial Planning profession to students. The students asked impressive questions.

 

A student asked, “which part of personal finance do we have to know in order to pass the CERTIFIED FINANCIAL PLANNER™ exam?”

 

I attempted an answer by saying, “We study and then are tested on budgeting, retirement planning, education planning, debt management, investments, estate planning, and insurance.”

 

My colleague next to me politely added a topic that I missed: “taxes.”

  • My response to her was, “Ugh… I forgot. I don’t like taxes.”

 

Do you have similar reactions when it comes to taxes? The tax process is confusing, we don’t have a choice, and we don’t really learn it in school. I often make the joke:

 

“Isn’t it funny we learn how to identify a rhombus in school and we don’t learn how to pay our taxes?”

 

Yet, to make a positive spin on paying your taxes, according to PBS, almost 60% of our federal income taxes support social insurance programs to help people like the elderly and lower-income populations.

 

For a quick breakdown of these social safety nets:

  • 43.5% of your federal taxes goes towards Social Security and Medicare
  • 15.5% of your federal taxes goes towards Medicaid and CHIP

 

A friendly tip: here’s the way I remember the difference between the two:

 

Silver Hair: Medicare

Underpaid: Medicaid

 

Below are a few lists of resources and information I share often to help people navigate taxes. Hope you enjoy and there’s a corny tax joke reward at the bottom!


Ways to File (possibly for free)

 

  • IRS Free File
    • If you income falls below $66,000, you’ll be eligible to receive free offerings

 

 

 

Tax Smart Investing

 

We nudge our clients to focus on what they can control with their investments. For this quarterly email, we focused on how our clients can position their investment accounts to:

  1. Lower Your Taxable Income
  2. Accounts to Build with Tax-Deferred Growth
  3. Prevent Tax Mistakes and Liabilities Where You Can

 

Read our analysis and strategies here:

Invest with Taxes in Mind!

 

Tax Resources & Education

 

For my fellow geeks who love learning, check out these resources to learn about taxes:

 

Articles

 

Podcasts

 

Portals

 

Videos

 

Corny Tax Joke Reward

 

And to lighten the mood this tax season, here’s a joke from Jimmy Kimmel:

 

“I’m not going to pay taxes. When they say I’m going to prison, I’ll say ‘No, prisons cost taxpayers a lot of money. You keep what it would have cost to incarcerate me, and we’ll call it even.’”

 


Thanks for reading and if you want guidance on how to navigate your personal finances, please get in touch with me or learn more at Well-Rounded Success’ Services on the website.

Daniel C. AndrewsAbout the Author

Dan Andrews is the Leader & CERTIFIED FINANCIAL PLANNER™ of Well-Rounded Success. Dan enjoys guiding and encouraging individuals through a variety of money subjects with a focus on behavioral finance. Dan’s vision is to impact communities by encouraging individuals to define their own paths, handle their responsibilities, and to give back while on their journeys.

Cover Photo by _M_V_ on Unsplash


If you like this article, check out two more from our Well-Rounded Success blog:

How to Find A Fiduciary: Three Questions to Ask Financial Professionals

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Invest with Taxes in Mind