How to Use Your Tax Filing to Give an Account?
Creating a Legacy With Your Taxes – Part 2
Most of us don’t understand that when we pay taxes, we are directly impacting the world around us. Since legacy is our ability to make an impact; it must also be the marks we’re leaving. You see legacy represents who we are today not who we will be someday.
Since it’s our tax dollars that provide a better way of life not just for self, but for others, it’s an act of giving, displayed in the present. The question is how are you treating this level of giving? When you see it this way, you’ll learn to appreciate what happens with it and will fight to ensure its best use and your best handling of it.
The Thought or Concept:
How long will you do it this way?
Everyone one has someone who does their taxes even if that someone is you. I must ask this question, then. How long will you do it this way? I know people who year after year hate to file their taxes, because they do it, see it, and think of it in the same way. Now I have no intentions on sharing with you how ordinary people do their taxes, but rather how you can use your taxes and how filing them can promote your legacy in an uncommon way, of course.
You see performing this necessary task allows me to look over my financial year. I get to take a look in every area for which we do our spending, giving, saving, and anything else that requires money. I’ve learned to look forward to this exercise because as a part of our family plan we have goals set and this is the only way we can measure its status. In other words, we use our tax filing as a small input into our financial planning for the year. Where do you plan to be in a year as it relates to your money? Or will you (like normal people) continue to do it the same?
“Again, the Kingdom of Heaven can be illustrated by the story of a man going on a long trip. He called together his servants and entrusted his money to them while he was gone.
After a long time their master returned from his trip and called them to give an account of how they had used his money.” – Jesus (bible.com/bible/116/MAT.25.14,19.NLT)
Jesus tells this interesting story and the point that stands out to me is that the servants had to give an account (a status) of what they had done with the money they were given. This tells me that we too must give account and I use the process of filing taxes as this opportunity. The only people who don’t wish to give account are those who’ve not done so well. Any one who’s done well, made a fortune, doesn’t mind going through this exercise. I’d like to make a legacy like the servants The Master was pleased with.
Build a Checklist
Remember at Kerry A. Clark & Co. we preach that you must have a plan for everything. If you don’t have a plan for giving an account, you plan to fail at it. As I alluded to early, there are people who do it the same way year after year, that’s not me and after this lesson it will no longer be you. With that said let’s talk about a few things you can put in your plan.
- Don’t go backwards.
Most people when trying to add a new habit like to go back to the place they previously left-off. Instead of going backward and digging through documents, just start anew. Don’t add a huge task of finding the backlog of all your documents and paperwork. Wait until you get to that step in your plan since we’re starting anew.
- Create a simple system.
I believe in simple systems, ones we can easily and almost effortlessness perform. For the items you know will be needed for tax filing, store them in the same place. Don’t scatter them around in various locations. For this I recommend my binder solution. I keep a plastic file folder with me at all times so that I can stick my tax related items in the folder. Create a way for you to have a place just for these items.
- Add what you know you needed from previous tax filings.
Off the top of your head you can think of the most important items you needed to get those taxes filed. Go ahead and add these items to your storage location. BTW – I realize that you won’t have a few items at this time of the year, like W2’s, but for the most part you’ll have a few items. Don’t put it off, that’s what a normal person would do. Act today.
- Update your process each year to make it more thorough and efficient.
This is the step I wanted to get to. You see we have someone who does our tax filing for us. What I noticed is that every year they give me a little cheat sheet so that they have everything they need to complete the task. But what if their cheat sheet became my routine list of items to add to my “giving an account” (accounting) practice? Let’s see what I’d have handy when it’s time to file. Using their cheat sheet, I’ll have…
- both sets of W2’s (the income we earned and taxes we paid)
- tax forms from various bank accounts (any interest we made on our savings)
- state tax forms, tag renewals and property taxes (what we paid for auto tags and property taxes)
- dependent care items (i.e. daycare, summer care, and before & after school care)
- both sets of health insurance forms (information on our health insurance)
- all medical items which includes dental, medical, eye-care, pharmacy, and health & fitness (a record of our medical expenses)
- all our charitable contribution statements (our giving and acts of kindness records, this includes our tithe)
- any business expenses (a record of what we spent to do business)
- student loan forms (our student loan status)When you have a cheat sheet like this, you already have a head start on what you need for the next go-round. So begin now. Why go home over and over again because you forget to bring the items you already have known you needed? By the way, this is a perfect place to remind you, it’s your life and your life is your business. No one else is going to run it for you.
I heard these words from our tax preparer “this is the easiest tax preparation I’ve ever done.” I said explain please. “You have everything I need, it’s summarized, in order, and has all the supporting details”. Why was this possible?
Today is Friday!
It’s possible when you take your life as seriously as a person who takes their business seriously.
It’s possible when you start right where you are.
It’s possible when you create a simple system you can manage.
It’s possible when you add the items you already know you need and don’t wait until the last minute.
It’s possible when you update your process with the process your preparer gives you as a cheat sheet.
Question: How can you create a legacy by using your taxes as a way of giving an account of your life?
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