By Bonnie Lee — When we think of wellness, we usually think in terms of physical health, mental health, and spiritual well-being. Things material: especially money, are eschewed – thought to be crass and worldly. But don’t be so quick to turn your nose up at the concept of money as a spiritual element in our lives.
Money is not just money. It’s nothing you stack in a room to be displayed like a work of art. Money is really an intangible. It’s symbolic. It represents contribution – giving and taking. It represents each of us providing and receiving goods and services to better the lives of everyone in our society.
Ancient tribes lived their economic lives through the barter system – I can make this for you and you can do that for me. But things became complicated. A doctor may need a loaf of bread from the baker but the baker doesn’t need medical attention. Therefore, a direct exchange cannot occur. For the sake of efficacy and efficiency, money was created. A medium of exchange. Giving each other credit – a token, a dollar bill – to use to access the services and products we require to get through this life. So in that sense of the word, money represents contribution.
The taxes we pay are considered our contribution towards the running of our country. From these funds we pay for infrastructure, public buildings and services, the protection of our environment and the education of our children. We should all be happy to contribute even if things aren’t run or maintained as well as we think they should be. By the same token, we should achieve “tax wellness” by not overpaying.
And so it’s important to keep a handle on our financial and tax health. Handling money properly can be guided through the advice of financial counselors and through the creation of budgets, goals, and projections. Tax wellness can be achieved through tax planning and becoming aware of how the tax code works in relationship with our particular financial situation.
Annual physical. The topic of taxes is indeed a cure for insomnia, but it would behoove you to ensure that your pocketbook is continually healthy by understanding how tax law applies to you. Especially if you encounter radical changes to your life: You change jobs, you become self-employed, you buy or sell your home or other real estate, you marry or divorce, you have a child or any other life changing events. These events can change your tax picture dramatically. And without proper planning and projections, you could find yourself financially ill come April 15. When these situations arise, I recommend getting together with your tax professional for a planning session to ensure your good financial health.
Symptoms of change. Sometimes it’s something from the outside that will influence your financial and tax health. A good recent example is Tax Reform. This is the biggest overhaul of the tax code since 1986, and no, taxes will not be getting simpler for most, they will become more complicated. These changes mostly benefit the top 1 percent. Many of the middle-class and upper middle-class will be paying more. Again, visit your tax pro to see how the changes affect you.
Disease. Failing to file tax returns – some folks go years without filing – and/or failing to timely pay the tax liability that is due can lead to disease. Not seeking a remedy to your tax problems is similar to failing to treat a physical disease once diagnosed. Letting these obligations go unchecked increases stress and results in poor financial and mental health. There are solutions to every tax problem. Some non-filers are scared to death of drawing attention to themselves by reentering the system. They fear jail time, heavy penalties, loss of property.
Thing is, the IRS actually craves welcoming taxpayers, like prodigal sons, back into the fold. If you cooperate with them, they will cooperate with you. And they are willing to work with those who owe liabilities that cannot be paid off immediately. Payment plans are available. If you are unable to pay even a dime, they may deem you “currently not collectible” and leave you alone while you regroup. For those who have no hope of ever being able to pay back what is owed, there is a tool called Offer in Compromise in which you negotiate with the IRS to reduce the amount owed to a manageable amount.
There is no reason to let the stress of tax problems affect your financial wellness and peace of mind. And there is every reason to discover what strategies to use to minimize your liabilities.