Navigating the Emotional Landscape of Taxes

Apr 16, 2024
taxes, taxes 2024, tax filing, personal finance, financial planning, tax planning, accountant, budget coaching, budgeting

For many of us, tax season is synonymous with stress, anxiety, and fear. People can feel like the IRS is going to come knocking on their door at any moment.

This looming threat can trigger a fight-or-flight response, leading to impulsive spending 🛍 when the refund returns—or even if it doesn't—and avoidance. Avoidance especially impacts people's ability to file taxes, usually stirred by shame and overwhelm. Shame might stem from past mistakes either they or a loved one made and had to suffer the consequences for. Overwhelm can arise from not knowing where to start, lacking the right guidance, disliking your accountant, or simply finding the whole process too confusing and giving up trying.

Let's not forget one of the biggest players in our emotional landscape around taxes is resentment. There's also a strong collective resentment that people feel around their taxes—resentment toward schools for not teaching tax filing, parents who didn’t model it correctly, or a government that seems to take too much. Despite many Americans believing we pay a lot in taxes, globally 🌍, we actually have one of the lowest rates and some of the best tools to reduce our taxable income, like 529 plans, HSAs, retirement accounts, and benefits for small businesses.

Read: Retirement 101 Roth vs. Traditional

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My Personal Journey Through Tax Chaos

I know these feelings all too well because I lived them. For five years, I didn't file my taxes. Every day, the dread of what I owed—to New York State 🍎, New York City 🗽, and the IRS—was a constant shadow over my life. It was a monumental task to get everything organized, one that I wouldn't wish on anyone. This stress and fear were what propelled me to start Beyond the Green. I wanted to ensure that no one would have to face their tax issues alone or feel overwhelmed by the complexity of managing their finances.

Emotional Management Tips

Handling the emotional side of taxes is as crucial as crunching the numbers. Here’s how you can start:

  1. Reflect on Your Beliefs About Taxes: Spend some time thinking about what taxes really mean to you. Do you feel they just a burden, or can you find a way to view them as a contribution to something larger that benefits all of us? Can you literally thank taxes everytime you go on a bridge or under a tunnel. Changing your perspective can help alleviate some of the emotional weight. This sounds so cheesy 🧀but it really works. Neuroscience literally supports the belief that if you change your mindset, you change your perspective and overall mood. 

  2. Shift Towards Gratitude: As mentioned above, try to find elements of the tax process for which you can be grateful. Whether it's the public services, your taxes help support or the availability of deductions and credits that can reduce what you owe, focusing on the positive can transform your approach. Thank your accountant or turbo tax. Thank yourself for being prepared and organized.

  3. Optimism and Grace: Approach your tax situation with optimism. Mistakes happen, but they can be corrected. Allow yourself grace for past missteps and focus on how you can improve your tax handling moving forward. This is very specific but everytime you think about your taxes say to yourself "this is going to be a great tax year." You will be amazed at the results.

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Handling Refunds and Debts with Emotional Intelligence

The emotions that surface when dealing with tax refunds or unexpected debts can lead to hasty financial decisions. If you get a refund, it might feel like "free money," tempting you into immediate, perhaps unnecessary, purchases. In the next blog post Smart Strategies for Your Tax Refund and Managing Owed Taxes, we'll go over exactly what to do with your tax refund.

On the other hand, owing more than expected can induce panic, leading some to make poor decisions like dipping into retirement savings or accumulating high-interest debt. Don't worry we'll cover this in the next blog post as well!

Managing your taxes effectively isn't just about getting the numbers right—it's about handling the process with emotional intelligence. By confronting the emotional aspects of tax filing, you can make the process less daunting and more sustainable. Whether you’re celebrating a refund or strategizing to pay off a debt, remember, you don’t have to do it alone. Beyond the Green provides the support and guidance you need to navigate your taxes confidently and easily.

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