Filing Our Taxes

Every year on or before April 15, we met with our tax preparer to file an extension.  We file this extension not because we want to delay paying so we can earn more interest on our money but because we don't receive the K-1s that are needed to support our taxes.  They are typically not sent out until August or September of that same year.

The extension gives us an extra 6 months before we have to file our taxes for the previous year.  That new deadline is October 15.  So, sometime around the end of September, we get with our tax preparer with our K-1s to file our taxes.

Many people prepare their own taxes to save the money of having to pay a tax preparer...  but we pay our tax preparer $100 so it saves a lot of hassle for just a little amount of money.  This year we get back $120 and paid out $100 plus a little bit of our time.

While we were there we asked if she could project out taxes for the next year.  After making a few assumptions, it took her 5 minutes to get the answer.  Yes...  next year we will be paying a hell of a lot more in taxes than we paid this year.

REASON:  We made a shitload of money by investing in high yield CDs over a period of 18 months although we are only looking at 12 of those 18 months.

The way that it will work out for us is that our taxes will represent about 11% of what we earned.  This means, we will be able to keep 91% of our earnings which is not a bad return.

Because we are in the state of Tennessee, our Social Security is not taxed.

If we calculate the taxes we will pay as a percentage of our total income for that year, it will be 6%.  Again, we will be able to keep 94% of our total income for that year.

Our positive situation is directly related to the amount of money that we have been able to save over the course of our lifetimes....  or at least up until we retired.

The money you earn while you are working is typically used to pay a mortgage, school loans, food, utilities, insurance, car payments, etc.  More often than not, couples today do not save money for retirement.  They also acquire lots of debt that must be serviced before they retire.

POOR FINANCIAL PLANNING leads to a devastating retired lifestyle...

LEARN TO BE FINANCIALLY SMART WITH YOUR MONEY...