Dear Young and Learning About Money, There are three reasons you should learn to do taxes. Let me start by telling you about how I was led to the first reason.
Going back a few years, I knew nothing about how to do taxes. Sure, I knew some things that could save me money on my taxes. But, I did not know how to file them myself. Because of various accounts and situations my taxes are considered complicated. With this in mind, I had determined that all I had to do was to turn my tax preparation over to an honest accountant who had tax-reparation competence. So, at that point, I felt confident that my accountant was competent. A banker had recommended him after all.
So, fast forward…
It was a year after I had been working with the banker-recommended accountant when I met someone who had recently started a small business. She was telling me that her accountant was already giving her advice about how to structure her activities in order to save on taxes.
Hmm, I thought to myself…My accountant had not given me any suggestions. So, when I went back to my account the following tax season, I mentioned the idea of needing to lower my taxes. He quipped, “You have to pay SOME taxes.” (I never said that I didn’t expect to pay ANY taxes. I just did not want to OVER pay taxes.)
Well, needless to say, I realized that he was not the best tax preparer for me. Now, to be fair, he may have felt that my taxes were low enough. However, I will never know because he did not engage me in any conversation at that point. He had no idea of what I knew about taxes or what I knew about things that could raise or lower my tax obligations.
So, I did not know whether his response was due to the fact that it was too much effort for him to help me lower my taxes, he did not know how to lower my taxes, or for some reason, did not want to help me lower my taxes.
So, this led me to the…
First of Three Reasons That You Should Learn to Do Taxes
This is your life and your money. No one will ever care as much about you and your money as you. In order to be able to ask questions about your taxes, it helps to know something about taxes. For instance, you need to know the types of questions to ask. A more specific thing that you need to know is what a tax credit is in order to be able to ask if you qualify for a specific tax credit.
You may have an accountant or even a financial advisor, but remember, financial advisor advises (and accountants) do not tell you what you do. A good financial advisor should be willing to teach you. But, ultimately, it is up to you to decide what to do with your money. Starting to understand your taxes is the first step in understanding what is happening to your money.
The Second of Three Reasons That You Should Learn To Do Taxes
If you know how to do basic taxes, you can save money by doing your own taxes. This is best to do only if your tax situation is simple rather than complex. Simple would include things such as having only one employer during the tax period being considered and not having many or a wide variety of investments. By simply using a self preparer software package you can easily prepare your own taxes. These programs will take you through prompts, sort of like a questionnaire.
Of course, you don’t have to do your own taxes until you feel comfortable doing so. But, starting now to learn how to do them is the only way to be able to do them later.
The Third of Three Reasons That You Should Learn To Do Taxes
The third reason to become a tax preparer is because if you get really good at it, and enjoy it, you may want to become a tax preparer as a side hustle. There are some tax companies that hire tax preparers for the tax season. One such company that you may have heard of is H & R Block. I don’t think that you can make a lot of money doing this as a side hustle, at least not when you first start. But, since I am only talking about doing it as a side hustle, anything that you bring in from the job will be supplemental income, which is always useful. In any case, I think that you would learn a lot from the experience.
Now, if you happen to love preparing taxes, and you have great skills, you could even think about starting your own tax preparation business. You never know!
Three Reasons That You Should Learn To Do Taxes
: Key Takeaways
- This is your life. This is your money. The more that you know about taxes, the more you will know about how to minimize your taxes and maximize the money that you keep. No one else will ever be as invested in your money as you.
- You can save money by doing your own taxes.
- If you are very good at doing taxes, and you enjoy it, it opens up the opportunity for you to get a side hustle as a tax preparer.
There you have it…Some reasons why I think that you should learn how to do taxes.
Reminder: I am not a CPA or accountant. Do not take anything that I say as tax advice. Talk to your accountant.
Don’t delay, in some small way, make your life better than yesterday.
You can do it! I have faith in you.
Hugs,
Rich Mom
P.S. Here is a link to a free IRS tax training information (designed for volunteer training):
https://www.irs.gov/newsroom/heres-how-people-can-become-an-irs-certified-volunteer
Check out these posts, if you are looking to read more:
10 Things That Everyone Under Age 30 Should Know About Taxes
Building Wealth In Your Twenties
Having Fun While Building Your Wealth
Becoming a Credit Card Deadbeat
Who is Rich Mom?
If you stumbled upon this post and you are wondering who Rich Mom is, check out my “About Rich Mom” page.
Also, please note: I am not an investment advisor. Always do your own due diligence and research before investing. Check with your own investment advisor.
Also, remember that past performance is not a guarantee of future performance.
The information shared here is not intended as financial advice, just entertainment and entertainment.