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Lessons Learned From Tax Refund Season – Ep. 142

Is your tax refund strategy setting you up for success or disappointment? In this episode, let’s discuss lessons learned from this year’s tax season. Discover why relying on a sizable tax refund as guaranteed income can pose financial risks. Learn smarter strategies for managing your refund and aligning your financial plan with guaranteed income. So let’s go!

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Podcast Key Points

0:00 – Episode Overview
1:25 – Eligibility for Tax Refunds
10:09 – Why Are Refunds Are Less

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Lessons Learned From Tax Refund Season

Let’s talk about tax refund season. I feel like we do this every year and it’s always one of the most popular episodes and I’m kind of excited for this year’s episode. So here we go!

This is the Your Money Your Life podcast. I’m your host, Aimee Cerka, a money confidence coach for female entrepreneurs on the path to six figures. After over 10 years in the personal finance industry and multiple personal financial and medical crisis.

I was fed up with the lies that are being shouted from the rooftops by the Gurus and the media said I help you simplify, solidify and scale your money. By blending tactile money strategies with mindset work, you can create unstoppable finances together, you’ll finally figure out the money thing. So you can make more money in less time without living off of beans and rice, or sacrificing your lifestyle.

Episodes here on the podcast are short and sweet. Being married, having four kids at home, homeschooling being the CEO running the household, I’m kind of busy. And I know you are too. So let’s keep it simple and get to the point. Welcome. I’m so glad you’re here!

Understanding the Tax Landscape

Welcome back to the Your Money Your Life podcast. I’m your host, Aimee Cerka. We are talking about lessons learned from this year’s tax refund.

So we’ve done at least one episode on tax refunds every year, are always one of the most popular episodes that we do. And I’m going to link to last years and they’ll at least be one more year before. Because I find that they’re going to be helpful, those are a little bit more on like the strategy behind like how to maximize your refund. And that’s definitely important.

This year, though, I want to talk about some of the lessons that clients and people that I’ve observed, have learned. Okay, so overall, a lot of people are seeing that their refunds are less. And I guess before we get into that, let’s just back up a second.

The Refund Reality

Whether you’re paying into whether you’re having to pay for like taxes, and you’re having to pay or you’re getting a refund, and how much of a refund you’re getting, that’s kind of what we’re talking about here. The overall, there’s been more of a tax or tax burden for people. The tax code is not something to be afraid of; the IRS is not something to be afraid of.

We talked about that a couple of times already this year, like this is just like these are the rules that we’re following these rules. I don’t want to say this is the law of legally because like it’s not actually legal. And yeah, okay, that’s a whole ‘nother story.

But this is what we’re dealing with here. And there are strategies to lower your tax liability. And I believe that you should do that, and should take advantage of that. That’s still here. And this is also why we still talk about tax refunds because you can like make a decent amount of money and still be eligible for tax refund legally, morally, ethically, all those things. Okay.

Now that we got that out of the way, let’s talk about the refunds. So overall, a lot of people have seen that refunds are less and a lot of that has to do with several tax law changes that we’ve like, seeing experience have been putting into effect that we’re feeling right now. If your strategy is to have more taken out through the year, so that you receive a bigger income, like the problem with that. And don’t even know that’s really a problem.

Dangers of Counting on Uncertain Income

The problem with the way that most people are approaching our tax refund is they’re approaching it as guaranteed money. It’s not “this is if come if it comes then we can do that.” Okay. We are not guaranteed this.

So when you build your strategy on having a big tax refund on your if come if this happens, then we’ll be set. If we do this, then we’re fine. Having it and getting it that’s fantastic. Because then that’s what what can you do with it? Like counting on it. That’s when we get into trouble.

And this is the biggest lesson that I’ve seen, that people have to learn this year is because we built all of our strategy, maybe it is we put Christmas on the credit card every year and then we use our tax refund to pay it off. There’s still counting on income, so have the plan in place to pay off that thing or buy whatever it is whatever, especially if it’s a need. But it’s a want that’s like another thing like just don’t get it then.

But if it’s something that you need, don’t build the strategy around something that’s not good Guaranteed, and having the big tax refund is not guaranteed and the IRS releasing the big tax refund to you is not guaranteed. There’s a million things that can happen between like January and March of next year, whenever you get the tax refund from right now. So if your strategy is to have more taken out throughout the year, and receive a bigger refund, but still if come because, again, the IRS might find something wrong, they might not release it, something might happen.

They might freeze all tax refunds, whatever it might be. You don’t know until you actually receive it. So the smarter strategy there would be have your employer or whoever, when they’re writing the pay stub, like just put some away in a savings account, have a direct deposit in a savings account, so you don’t see it.

But then you’re still paying anyway. And you’re not just because essentially, you’re just having the government hold on to your money. And that’s not really a smart move. Definitely not a smart move in my book, because we’ve seen how they handle money, right?

Learning from Entrepreneurial Pitfalls

We need to not build our game plan or strategy on income that you haven’t received. A lot of entrepreneurs do this as well. It’s like I have had this million dollar launch. But I only received, I don’t know, 50,000 of it, right?

Those numbers are gonna be off. But what have you actually received the money that you got in the bank, because we’ve all heard Stripe, PayPal, holding your money, right? Especially PayPal, we’ve all heard of them holding your money, because then it’s not your income, you haven’t received it, if you don’t have it available to spend, don’t count on it.

Like it’s not something that you should build, like your day to day strategy of like, this whole thing is built on this one thing happening and you receiving that income and if it doesn’t happen, then you’re screwed. That’s not the way that we need to build things.

Smarter Savings Strategies

Yes, we can. There are smart ways to use your refund, once you have them. I’ll link to those episodes, because that’s what we’ve talked about in years past, I want you to plan for it.

But it’s not a requirement. It’s not something that you need to make life work. Because there were so many posts that I saw this year that, “oh, my refund was less, and I don’t know how I’m going to make it.” And that’s just heartbreaking.

We love to have the plan and be strategic, but build a strategy on money that’s guaranteed, not the outcome, because you just don’t know. You don’t know what can happen. When you count on those things.

The Power of Guaranteed Income

That’s when we get into trouble. There is a push-pull, we know doing the work, which is very much like you know in the masculine and working on our numbers and those things and then being in the feminine and showing up and expecting things to work out. So there is still some of that. Yes, and I understand all of that.

But you still have to have the work planned out and doing the work and counting on the income. The tax refund is not the doing the work. Okay. That’s what I’ve got from this year, the biggest thing that I saw was, you know, the refunds were less and it was causing a lot of problems.

Smart Use of Refunds

And it was heartbreaking. And it just started raining much harder outside. Just interesting timing. links in the show notes to the episodes that we’ve done in the years past on tax refunds and maximizing your tax refund, like using it smartly. All of those things, those were super helpful, so make sure to check those out.

Access Resources for Financial Improvement

And then also in the show notes if you have not filed your taxes yet, or maybe he did and you want to do better for next year. We’ll have resources for you this up behind QuickBooks workshop, that’s a no brainer one, the Money Makeover QuickBooks audit if you don’t know if your books are up to date, and then I will also just include a link to the q&a call with me if you’re not sure like okay, do I need the workshop?

Do I need the audit? Do I just need you to help me with my QuickBooks because none of it makes sense? And I know I have to do better. I will make sure all those links are below in the show notes. That’s it for now. We’ll see you next time.

You’re struggling with shame and guilt around your finances. Whether it’s debt impulse spending mistakes from the past or the fact that you still haven’t hit your income goal, then it’s time for you to work with me. There are different levels of support and price points that you can use on the path to removing that guilt and shame so you can step into your unstoppable life.

After all, your finances are unique to you and your support should be too good to workwithaimee.com to get started with one of my most popular programs, or you can book a q&a call with me. We’ll figure out what your next step should be. And of course, all those links are hanging out in the show notes as well.

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Aimee Cerka
Aimee Cerka

The Money Confidence Coach - She helps motivated women, like you create the happiness, family life, financial security, and long-term wealth they deserve. Create unstoppable finances so that when the next curveball is thrown your way... You're prepared. Click Here to Learn More

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