Tax time: Real talk on filing, myths, and managing tax anxiety
Filing taxes is one of those things we’re all expected to figure it out on our own. Unfortunately, this often means it can be confusing, frustrating, or even downright terrifying.
In this episode, we pull back the curtain on their real-life tax experiences, from our first terrified attempts at TurboTax to navigating the complexities of self-employment taxes.
We’ll also:
Bust common tax myths, including what a “write-off” actually is and how tax brackets work
Share personal stories of surprise tax bills
Offer practical advice for building confidence during tax season
Help you figure out when it’s time to outsource
Whether you're an employee or business owner, a DIY filer or a CPA enthusiast, this honest conversation will help you approach tax season with less anxiety and more clarity.
🎧Listen in to hear about:
[00:02:00] Our tax journeys over the years, from nervous first-time filers using TurboTax to business owners who outsource.
[00:10:00] Common tax filing mistakes, including those we’ve made over the years.
[00:12:00] How procrastination and anxiety affect our approach to tax season, and how organization can help you get a hold on tax stress.
[00:16:00] Tax myths and misunderstandings, including why a big refund isn't always good, how tax brackets actually work, and why “tax write-offs" aren’t what most people think.
[00:25:00] DIYing your taxes vs. getting professional help
[00:30:00] Talking about taxes with partners, friends, and other business owners, and how to build confidence in tax-related conversations.
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Transcript
[00:00:00] Emily Batdorf: Are you drowning in money questions but too embarrassed to ask? Tired of scrolling endlessly through conflicting financial advice that leaves you more confused than when you started? Welcome to the Finance Girlies podcast, your cozy corner for all things finance. I'm your host Emily.
Cassidy Horton: And I'm your host Cassidy. We're both finance writers for brands like Forbes Advisor, USA Today Blueprint, and Yahoo Finance. Throughout our careers and personal lives, we have come to one realization. When we keep our money worries to ourselves, we end up feeling alone. That's why each episode, we tackle those burning questions you've been afraid to ask with no judgment, no jargon, just real talk about real money. Ready to finally get answers? Let's dive in.
Hello, hello, and welcome back to another episode of the Finance Girlies. Today we are going to talk about the least sexiest part of adulthood, and that is taxes. No one grows up thinking, wow, I can't wait to file my taxes someday. It's one of those things that you're just expected to figure out, like parallel parking or remembering to defrost a chicken before dinner. But taxes aren't just a boring adult chore. They can be confusing, stressful, and sometimes downright chaotic. As you will learn from Emily and I, we've both had unexpected tax bills that felt very chaotic. And no one teaches you this stuff, yet somehow we're all supposed to just know how it works.
[00:01:00] Emily Batdorf: So today we're pulling back the curtain and sharing our real life tax experiences, from filing our first returns, to making mistakes, to learning how to handle taxes as self-employed business owners. Just one quick disclaimer before we get started. We are not tax professionals and this is not tax advice. We're just two finance girlies talking about what we've learned as we have filed taxes throughout our lives.
So let's start by sharing a bit about our tax journeys over the years. I can start. The first time I filed all by myself I think it was after college, and I did so using the TurboTax, probably free program, and I think it went okay. As far as I remember, everything was smooth. I think TurboTax makes it really easy to go through if you're new to doing taxes. It guides you through every step. And my situation at the time was also really simple. I had just one W-2 job. I was single, had no dependents, and I also lived in a state with no income tax, so I didn't have to worry about that. So that was really nice.
[00:02:00] Prior to that, I just send in my stuff with my dad and everyone else in my family who was earning income and just use the same person who filed taxes for me. So that was really nice. Using TurboTax was like a step up from that for me. But then beyond that, when I started freelancing, I tried to do taxes on my own using TurboTax and it just felt a little bit too complicated for me to do on my own. And I quickly made the decision, like, I just want this to be easy and make sure I'm doing it right. So I'm willing to like hire someone to help me do it.
[00:03:00] So that's how I've been doing it the last three to four years. The first year of business, I just worked with a bigger company like an H&R Block to file my taxes. But since then, I've transitioned to working with an enrolled agent who files my taxes for me and she specializes in working with business owners. And that's someone local who I just visit once a year and can chat with online at any time throughout the year. But what about you, Cassidy? How has your tax filing changed over the years?
Cassidy Horton: Yeah, I feel like our stories are kind of similar. I kind of like started using TurboTax and then once I became a business owner, have tried a few different things since then. So I got my like first part-time job where I filed taxes my freshman year of college.
[00:04:00] And from my freshman year of college on, I used TurboTax online. And I remember the first year I filed taxes, I was so terrified to do it because I feel like all you hear about taxes is just like, how complicated it is you know the IRS is very scary and they're mean and like you can get audited and all this other stuff so I just remember feeling terrified and then I used TurboTax my first year and similar to you I had a very simple situation right like just a W-2 job from working on campus I did have like some college tax credits or whatever to claim but I other than that, it was like no dependents, didn't own a house, like none of that stuff applied. And I just remember getting to the end of that tax filing process and being like, wow, this was so easy. It almost felt like a game, like the way TurboTax has it set up where you just answer a question and then it shows you.
[00:05:00] So it just felt really easy. And then I still use TurboTax even once I got married because I still had a W-2 job. My spouse had a W-2 job. We still like didn't own a house, have dependents or anything like that. So it still felt very easy. And we did live in a state with state income tax, but TurboTax was even like really smooth at handling all of that.
But then once I started freelancing, I felt like things got a little bit more complicated and I probably could have tried to figure out how to use TurboTax as a freelancer. Like I know they have packages for self-employed people, but honestly, I was just kind of terrified to mess something up with my taxes. It just felt like this whole new level of things that I needed to understand and it felt very scary. So I was like, there's no way I'm even going to trust myself to use TurboTax correctly to file my business taxes so my first year in business we actually had a family friend who was an accountant so he helped us file our taxes and he was really great because he helped me do extra things for my business like getting an EIN which is an employer identification number set up so I didn't have to keep giving out my social security number every time I worked with a new client and he helped me set up like a profile online to pay my business taxes with my state so I think a lot of good came out of that.
[00:06:00] But then at this point, even my first year of freelancing, I think I earned like $43,000 my first year of freelancing. And moving into that second year, I already knew based on what I had already been earning that year that I was probably going to double my income that year. And you and I have a shared business mentor who always talks about if you're making at least 60 or 80K in your freelance business, you could probably save taxes by being an LLC that's taxed as an S corp rather than just like a regular LLC.
So that piece of information was already in my mind. So I already knew that like I will probably use this tax person for this year only, but then for the next years on, I probably need to find someone who knows how to like file taxes for an LLC that's taxed as an S corp.
[00:07:00] So anyway, I'd been getting tons of Instagram ads for an online company that does exactly that. They're called Collective. So that next year I started working with them and they have done my taxes ever since. And they actually handle like, since I'm a business owner, they handle all of my business taxes for me and all the things that I need to do for that. So like they tell me my quarterly estimated tax payments every year and remind me when I need to pay those. They do like all of my profit and loss statements and my bookkeeping for my business. They file my business tax return every March. And then they also file my individual tax return every April.
So I outsourced it to them in 2020, still use them and have no plans to leave them because I just feel like they handle all of the parts of my like tax life that I don't want to touch or be a part of. And they just tell me what they need from me and I get it to them. And that is kind of it. So that's been my process the past four tax seasons now.
[00:08:00] Emily Batdorf: So I do have one question about collective and like filing with your spouse. So do they handle all his stuff too?
Cassidy Horton: Yeah, they'll just ask for all of our documents. Yeah, they make it really easy that honestly probably would have been a deal breaker for me if they didn't do the individual tax return too because then it's like you still need to find this other thing to do the bulk of like your tax return that you do each year but yeah, they handle everything.
And even throughout the year, like every single time, it's time to do quarterly estimated taxes. They'll send me an email being like, has anything about your tax situation changed? Like, do you still plan on filing, married filing jointly this year? Just to make sure that they're estimating your taxes correctly.
And I didn't say this before, but if you're listening to this and you're also a freelancer or a business owner who's thinking about using Collective, I do pay like a little over $3,000 a year for it, but it is a business write-off, which will talk about in a little bit but I feel like it's worth it because I work with them on a month-to-month basis and it I feel like I can just fully trust to send it to them and it's all good so it feels worth it to me do you know about how much you pay for your tax person?
[00:09:00] Emily Batdorf: Not that much, although I totally understand the, like, I would probably be willing to pay more for that peace of mind. And my business is not taxed as an S-Corp, so it's a little less complicated. I think I pay around... I want to say like $300 or $400 total, like a year. And that's like, it doesn't include any bookkeeping. I do all that myself. So it's definitely less involved, but so far so good. It's working well for me. Yeah.
Cassidy Horton: I love that.
Emily Batdorf: So let's talk about a few mistakes we've made, if any, when it comes to paying taxes. I know for me, really, I think the only thing that comes to mind is not paying quarterly taxes as a business owner.
[00:10:00] I think that's kind of common for anyone who's not a business owner. If you are self-employed, you are responsible for making estimated tax payments every quarter. And if you're coming from a W-2 job, it's not something you're used to doing. It can feel a little intimidating. Honestly, I don't feel like I totally had that under control until I started actually working with a tax professional to like guide me through that process what about you?
Cassidy Horton: Yeah, same whenever i mentioned that my first year freelancing we worked with a family friend who like helped me set up an ein and all of that and he also explained quarterly estimated taxes because my whole first year of freelancing i did not pay any quarterly estimated taxes at all and i did not start freelancing with the intentions of not paying them it just felt so scary and i didn't know what to do and i didn't want to mess something up that i just kept avoiding it and like kicking it down the can.
[00:11:00] And all of a sudden it was time to fall taxes. And I was like, oh, crap. I freelanced all of last year and did not pay any quarterly estimated taxes at all. Whoops. But then once someone walked me through it, I was like, OK, you've got this. You can do it. It's all good.
Emily Batdorf: Yeah, once you do it the first time, it's like, it's all good, but it definitely helps to have someone guide you through it to know what you're doing. Let's talk about the emotional side of taxes, like what emotions come up for us now and throughout the years, what that's looked like. I know for me, procrastination has been a theme of filing taxes over the years.
[00:12:00] I would say most years, I've really put it off as late as possible because it honestly just feels like another chore. Also, I'm not the most organized person, although it's something I'm really working on this year. You can ask my husband. But I will say working with a tax pro has really helped me in that regard. Like I need to be organized and proactive and get things to her on time. So that has been a huge, huge improvement from when I was doing things myself.
And like, as I think you mentioned, like the first time you filed your taxes, it was kind of like a... Oh, that wasn't so bad. Like, I think I have a similar view on it now, though I will say every year when it's done, it is just like a really big sense of relief that it's done.
Cassidy Horton: For sure. I think for me, the two biggest emotions that come up around tax season are procrastination and anxiety. And I think as I reflect back, these come from two different situations. So I have noticed similar to you, like, right, my tax situation started out really simple.
[00:13:00] And then once I became a business owner, it became more complicated. And all of a sudden, you're getting tax forms for almost every client you've ever worked with. And maybe you're needing to send tax forms if you also paid someone to do some type of service. And I was really disorganized my first few years as a business owner. Like I would get a tax form and maybe stuff it in a drawer somewhere. And there were like nothing was organized on my desktop if I had like digital tax forms of any kind. And so I would just procrastinate, procrastinate, procrastinate because I did not want to set aside all of the time it would take to scrounge up all of those documents and make sure that I didn't miss anything.
Like so I would just hold it off for as long as possible. And I will say one thing that's helped alleviate that now is just being more organized throughout the year. And I think we'll talk about this more in a little bit. But one of the things that's helped me the most with alleviating my procrastination is just creating folders at the beginning of each year.
[00:14:00] So like I already have a desktop folder called Taxes 2025 on my computer and any tax document I get that's a digital document this year will go in that folder. I'll put my receipts for my quarterly tax payments in that folder. So everything is just there. And then I have a physical folder as well called Taxes 2025. And then any physical things that come to me through the mail, I'll put them in there. And that has helped tremendously with my procrastination.
And then the second emotion is anxiety. And that is because my second year as a freelancer, like I said, my income pretty much doubled from year one to year two of freelancing. And I ended up with an $8,000 tax bill that I was not expecting at all. And luckily, even though I did have enough money in my business bank account to cover it, I was still so shocked that I owed that much, even with paying quarterly estimated taxes throughout the year.
[00:15:00] That even now, four years later, I still feel some anxiety until I know for sure if I'm going to owe or not. And I haven't had that big of a tax bill, even remotely close since then, but I still feel some anxiety around tax time. And I think it stems back to that one tax bill that I had four years ago. So yeah, those are the two biggest things that come up for me.
Emily Batdorf: Yeah, I do a similar, I have a similar system with a digital desktop folder and a physical folder for my tax forms. And why I didn't do that sooner, I don't know, but I'm glad I do it now. It's so, so, so helpful. And yeah i've also been there with the surprise tax bill and yeah i wouldn't say i have like anxiety necessarily around it but but yeah like no one likes getting a tax bill that's bigger than what they expected so it's just there are some feelings of unpleasantness for sure that you know that might happen again i will also say in terms of like organization having a business budget where I'm like setting aside money each month for taxes is a huge stress reliever so that is one thing for sure that i've implemented over the last few years that um yeah it's like a total game changer.
[00:16:00] Cassidy Horton: Yeah even though i live in a state with no state income tax i still just set aside like 30 percent of all the money that i make and just have it as like a tax fund of sorts just in case a surprise bill comes up and also so i always have enough money to cover like quarterly estimated taxes. Yeah. And yeah, that feels very nice for the peace of mind.
Emily Batdorf: Yeah. I agree. Okay, let's switch gears and talk about some tax myths and misunderstandings. It was funny because when we had the idea for this episode, we thought about like chatting through this topic and we were like... What tax myths? And then kept thinking of them. So I think they're more widespread maybe than you might initially think. And yeah, hopefully we clear up some misconceptions with this little segment.
So I'll go first. And one of the big misunderstandings or myths that I used to subscribe to was that like, this is awesome. I got a huge tax refund that is free money that I get to spend. No, huge tax refunds aren't actually a good thing, even though they can feel like it.
[00:17:00] Even though getting a massive refund might feel like you're winning the lottery, it's actually just the government giving you your own money back. So if you consistently get a big refund, it means you're overpaying your taxes all year. A quick fix is adjusting your W-4 withholdings so you can get more money in each of your paychecks. If that's something you need to do, you can just chat with an HR representative at your job to make those changes, and use that money throughout the year to actually help you out.
So for example, if you were getting that money throughout the year rather than in one big lump sum the following year at tax time, that money could have been in a high-yield savings account, earning interest, or invested, compounding for you, and working throughout all that time rather than you getting it paid back to you at the end of the year and missing out on that time in that account in the market wherever you end up putting it.
[00:18:00] Cassidy Horton: Yeah, this was 100% me in college. I craved that big refund. I was like, come on, baby, let's see how high she can be. And then whenever I found out that tax refunds are just you getting money back that you already paid in, I was like, oh. Yeah.
Okay, another tax myth or misunderstanding is just around how tax brackets actually work. I feel like it took me a while to fully understand how tax brackets work in the U.S. Emily, I think this is true for you too. And the misunderstanding is just that people think that if they earn more and move into a higher tax bracket, all of that income is suddenly taxed at that higher tax bracket. And that's not how it works at all.
[00:19:00] So the U.S. tax system is tiered, meaning only the portion of your income that falls within each tax bracket gets taxed at that rate. So let me give you an example because that was a mouthful. Say that the 22% tax bracket starts at $44,725. If you make $45,000 that year, only that last $275 is taxed at 22%. The rest is taxed at the lower rates. So you're not paying 22% on the whole $45,000 just because you're in that tax bracket and it's only the amount over the tax brackets below you.
Emily Batdorf: Yeah. On that same note, another myth is that working more hours or working overtime isn't worth it because you'll pay more in taxes. I think we've all heard someone say, I don't want to work overtime because it'll bump me into a higher tax bracket and I'll lose money. But that's not how it works.
[00:20:00] Like you just mentioned, Cassidy, only the portion of your income in the higher bracket is taxed at that higher rate. So you're still taking home more money overall, even if you do pay slightly more in taxes. So if you want to pick up an extra shift or take on a side project, you should go for it, knowing you'll still come out ahead and you're not going to lose money overall.
Cassidy Horton: Yeah. I remember growing up, I would hear stories like this from my mom specifically. And this is just me thinking back to like elementary school Cassidy and what she heard her mom saying. But I swear it would be a conversation like, I worked overtime this week. And so I made less money than if I didn't work overtime at all. That's at least how my memory is recalling it. And as a kid, I just remember being like, dang, that sucks. Like you worked more and got paid less. What? But yeah, not true.
So another tax myth or misunderstanding is just the difference between a tax credit versus a tax deduction, because there is technically a difference.
[00:21:00] And I feel like these terms kind of get thrown around almost as if they're interchangeable, but they're not. So a tax deduction lowers the amount of income the IRS actually taxes you on. For example, a $1,000 deduction would lower your taxable income by $1,000, which might save you a couple hundred bucks depending on your tax rate. But a tax credit reduces your actual tax bill, so it lowers the amount you owe dollar for dollar. So a $1,000 tax credit would lower your tax bill by a full $1,000, but it wouldn't do anything for your taxable income.
Tax credits are usually the bigger win out of the two, and some common ones include the child tax credit, if you have kids, the American Opportunity Credit if you're paying for college, and then the earned income tax credit if you're a lower income earner. And that might be a little in the weeds, but just knowing that there is technically a difference between those two terms.
[00:22:00] Emily Batdorf: Yeah, I think that's a common mix up as well. And finally, to wrap up with our tax myths and misconceptions, we could not do this episode without including a little clip from the wonderful David Rose from Schitt's Creek. So let's hear what he has to say about taxes. Here we go.
[David Rose clip dialogue about write-offs]
Classic love. Okay so to clear this up tax write-offs are real but they're not free money they just lower your taxable income.
[00:23:00] Meaning you pay slightly less in taxes. So, for example, let's say you spend $1,000 on a business expense. If you're in the 22% tax bracket, that write-off might save you $220, but you're still paying the remaining $780. So David Rose may think that the government pays for it, but that's not the case. You do.
Cassidy Horton: I like this. Even as a business owner who writes in finance, I still feel like my brain had so much to wrap around when it comes to tax write-offs specifically and what that means because it is so easy to get into the mindset of, it's a tax write-off. It's a tax write-off. Yeah.
Emily Batdorf: Yeah, and it actually kind of ties back into your previous point about deductions versus credits. You can think of it as a business deduction. So if you're spending $1,000 on a business expense and that is fully deductible, you're reducing your taxable income by $1,000. I think I just said the same thing again, but maybe in a slightly different way.
[00:24:00] Cassidy Horton: Yeah, yeah. It does. It does. And once again, it is so funny to me that whenever you and I sat down to plan this episode, I specifically remember being like, I can't think of a single tax myth I believed. And then we started looking into this and it was like the water spout just got turned on and myths and misunderstandings just started flowing out of us. And we were like, oh, yeah. Oh, yeah. So funny. Yeah, that was hilarious.
So now let's switch gears and talk a little bit about building our tax support system. And to kick us off, let's talk about when someone can decide when they can keep DIYing it versus when it's time to get help.
[00:25:00] Emily Batdorf: Speaking from personal experience, I decided to get help as soon as, well, I should say, if we're not counting TurboTax as help, I still kind of count that as DIY. Aside from that, I decided to get help as soon as I started a business. And I didn't mention this at the beginning of the episode, but I started a business around the same time I got married and moved states. So there were a lot of changes that happened at once and I just felt overwhelmed by that. So for many reasons, it was time for me to get help.
I mentioned this before, but I tried doing it myself or, you know, with my husband, but realized it would be a thousand percent better and easier and just overall more convenient, I guess, if I hired someone. So that was the turning point for me.
Cassidy Horton: Yeah, that's kind of how it was for me. And I keep wanting to say that, like, I know that platforms like TurboTax and all of its competitors do have packages set up for if you're self-employed, for if you have a mortgage, for if you've moved to different states, like they can accommodate all of those things.
[00:26:00] But for me personally, similar to you, I was like, I don't even trust myself to use this platform correctly. Like this all feels too complicated. I just want like an actual person to outsource this to, which is more of like a personal decision, right? Because you may have dependents in a mortgage and you may have moved states and you may still feel like, I think TurboTax is good for me, or whatever. Like, I can still do this.
I also want to share, though, that I have had family members do the opposite, where they used to get a lot of help, and then over time, as their tax situation simplified, they resorted to DIY methods. And my mom and stepdad specifically come to mind like they're kind of shifting gears into the retirement phase of life like my stepdad is retired they also no longer have a mortgage they just rent so their tax situation used to be very complicated when they were both working and they had a house and all this stuff so they would like get help with a local tax person that they used for years and loved.
[00:27:00] But then now their tax situation is very simple. And so, I don't know, a few years ago we were all talking about taxes and I was like, you should just try TurboTax and just see if it works and see if it feels simple enough based on how your tax situation is now and just see if you like it. And they've used it for a year since then because they're like, oh yeah, you're right. This isn't nearly as complicated as it used to be and I think we've got it. And that did save them money, right? Because it did end up being a lot cheaper than outsourcing it to like a local person.
Emily Batdorf: Right that's a good reminder but if you are kind of at the point where you think I would feel a lot better if I had some help and I'm willing to pay for that help it's worth noting that there are many types of professionals who can help you with your taxes. I think what you may be most commonly hear is a CPA or a certified public accountant and those I think tend to be more expensive than some of the other options. You don't need to work with a CPA if you want help with taxes, although you can.
[00:28:00] Some other options include enrolled agents or you might see the abbreviation EA. Tax preparers, financial advisors can help advise you on your taxes. And then bookkeepers can help you keep everything organized, especially if you run a business. So there are options.
Personally, when it came time for me to find someone and what I was thinking about, I knew I wanted someone local that I could go and talk to in person because I'm old fashioned that way. And I like going into the office and seeing her every year. I chatted with a few people in my local area via email and over the phone and ultimately just chose a woman who I thought would do a great job and just was a great, pleasant person to be around. And she is an enrolled agent. And I've been very happy with that decision.
Cassidy Horton: And then I took more of, I guess, the less local approach. I was like, I just want to feel confident that the person I'm working with truly understands my tax situation, which feels kind of unique.
[00:29:00] And that's how I ended up going with collective because I feel like as a self-employed business owner. that that is who they work with like they spend all day every day working with thousands of people who have somewhat similar tax situations to me so it just felt like the best choice for me even if it's a little more digitized and less of a local experience i guess yeah but yeah that was my approach.
Emily Batdorf: So in addition to hiring a tax pro and figuring out how to do that it might also be worth mentioning how to talk about taxes with your partner friends and family because people just have a lot of questions about taxes as we mentioned at the top of the episode like no one teaches you how to do this and it can be really comforting to be able to yeah, just share experiences, which is why we're doing this episode.
[00:30:00] So I am married and file jointly with my husband. We jointly manage our money, so the tax conversation is totally open, transparent, and we're both involved in that. I will say I don't have a ton to chat about with my family because my siblings and parents work W-2 jobs, but I do find a lot of comfort in chatting with friends who are business owners, especially when it comes to budgeting for taxes and you and me having those stories of owing a lot and reminding each other to make quarterly payments. It's just a really good feeling to know that everyone's going through this, even if your tax situation is a little bit different and there are people who can help you figure it out.
Cassidy Horton: Yeah, I agree. I share a budget with my spouse. We have combined finances. We also have several podcast episodes on if you should merge finances with a partner and how to merge finances with a partner if you choose to do that.
[00:31:00] And we share a little bit more of what our finances look like with our respective spouses. So if you're interested in learning more about that, definitely check out those podcast episodes. But I think because we're so open about our financial situation and we budget together and we have merged finances, there's not really a lot of conversations that go on. It's more just like, hey, do you have these files? I need to give them to my accountant and that's kind of it.
And then with family members, I wouldn't necessarily say that I'm having open conversations with family members, but as things come up, I'll be a little bit curious and be like, why? You know, like with my parents, I was like, Why are you still using a local agent? Because there were some like complaints mixed in of like, it's this much and we've got to go to this place because you have to like drive and deliver the documents because they live in the middle of nowhere and i just felt very complicated so i was curious about that and i was like why is that and have you ever tried an online platform and would you be interested in trying it and that those are just kind of natural conversations that present themselves but i'm not actively trying to seek out conversations about taxes with my family members.
[00:32:00] But then, yeah, it's always a joy talking about taxes with other business owners because, like I said, I wouldn't have known that I could save money if I was an LLC taxed as an S Corp if it wouldn't have been for one of our business mentors being like, this is how I do my taxes. So it just helps to share your experiences that way.
Definitely. And then the other thing that we want to talk about is just like how you can build confidence in tax related things, because I think even just having the confidence to to like do your taxes and face it kind of head on can be a part of that process of building your tax support system in a way. So, Emily, do you want to share how you've kind of built your confidence in tax related conversations?
Emily Batdorf: Yeah, I think, well, what we both just mentioned, like one, talking with friends and other people in similar situations about it, number one. Also just, it gets easier every year.
[00:33:00] And every year I try to kind of document the process. Like I have some documents that I've created that are like how to pay quarterly taxes. And just like, it gets easier every year, but I feel confident having some of those processes written down just for myself. In case I ever am like, wait, am I doing this right?
And then another thing I do is I keep like a running list of tax questions that I want to ask when I go in each year for my appointment with the tax professional I work with. And obviously like things will come up in the middle of the year and I'll just send her a quick email. But for things that aren't urgent, but I'm like, I think that's probably worth knowing about or I'm curious about or I feel like knowing more on this topic would help me make better financial decisions. I'll just create a list and bring that with me when I go see her and that does a lot for like my peace of mind knowing that I'm getting my questions answered and I'm just like learning a little bit more every single year. What about you?
Cassidy Horton: Yeah, I think for me, the thing that helps the most is once I go through a tax season, kind of reflecting on it, even if it's just for 10 minutes and being like, what were the biggest pain points in that experience?
[00:34:00] And how can I be nicer to myself through those pain points next year? And that goes back to the like one year I noticed, wow, you were really procrastinating filing your taxes and it's because I felt so disorganized because I wasn't keeping track of digital or physical pieces of paper at all whatsoever. So that's when I got the idea of like, let's just have some folders on standby for these things.
So you can just dump everything in there and not worry about it. And then it sounds like for you too, it was like, I maybe have some questions that I need to keep tabs on throughout the year. So I'm not scrambling at tax time being like, what questions did I want to ask? Like, what am I unsure about? So I think just doing a little bit of reflecting and being like, how can I make the next tax season even easier on myself? And then trying to implement those things moving forward. So it's almost like you're doing these different iterations of how you're doing your taxes as you go.
Emily Batdorf: That's a great way to sum it up. I think of it in the same way. Like, how can I make this easier on myself next year? And that's super helpful. Speaking of, let's just kind of conclude a little bit talking about making peace with tax season and like how to kind of relieve that stress a little bit.
[00:35:00] So I know we've talked about this, I just want to mention it one more time: keeping your physical and digital files organized so you know where to put your tax forms when you receive them and how to find them when you need them is key. If you're a business owner, saving for your taxes throughout the year will save you many headaches and save you from potentially panicking if you get a large unexpected bill. And for me, a big part of making peace with tax season is working with a tax professional, an enrolled agent who I trust. And then you can always think of small ways to make tax prep more enjoyable, so like get yourself a special treat, put on a fun playlist as you're organizing your, you know, collecting your tax forms.
I'm not sure I've ever done either of those things, but honestly, the relief and like satisfaction of having my taxes done for the year and knowing how much I'm going to owe, if anything, like... That is a reward in itself and just like allows me to move forward with financial plans and decisions. And that just feels so good.
[00:36:00] Cassidy Horton: Yeah, I feel like I kind of hold my breath until I know if I'm going to owe or not. And then as soon as I know what that number is, I can breathe. I'm like, oh, we made it. Even if my tax return isn't actually turned in yet, that is the moment of sweet relief.
Another thing I would add is just like as you go through your next tax season, you don't have to do everything all at once, especially if it feels overwhelming. Like take a day and gather up all the forms you can find. Take another day and maybe try to figure out what documents you can't find, but you maybe need to. Then start the process of filing your taxes whether it's DIY or with someone like you don't have to kind of torture yourself and try to push yourself through everything all in one day because when you're doing your taxes you're gathering up stuff from the previous 365 days of your life so sometimes it can it can take you some time and you may have a lot of things to gather so yeah, be gentle with yourself.
Emily Batdorf: Totally. And on that note, I think this doesn't necessarily apply to us, but might apply to some listeners.
[00:37:00] Like if you are someone who gets a big tax refund, one, consider what we covered earlier in the episode, thinking about adjusting your withholding so you can get more of that money throughout the year. But two, maybe just let it sit for a second once you receive that money and think about, you know, what's the best use of this money. I would say maybe hesitate before like spending it all right away and take your time preparing your taxes. Take your time thinking about what you want to do with that money to potentially set you up for the rest of the year.
Cassidy Horton: Yeah in my early days when I was getting tax refunds I would use them to like pay off some debt or build up my emergency fund something that felt like it would get me a little more financial security. Those are great ideas.
So to wrap this up, if taxes have ever made you feel stressed, overwhelmed, or like you're just winging it and you have absolutely no idea what you're doing, welcome to the club because no one is born knowing how to do this stuff and honestly in our experience it gets easier the more you deal with it.
[00:38:00] And kind of our biggest takeaways or words of wisdom is just to remember that a big refund isn't always a good thing, when it comes to tax brackets you're not gonna lose more just because you earn more. Also, staying organized is a lifesaver. So I know you've heard this a million times by now, but go ahead and make your taxes 2025 folder right now. And then remember, if your tax situation gets complicated, getting help is always worth it.
Emily Batdorf: At the end of the day, taxes are just another part of life. The more you understand them, the less intimidating they will become. So whether you're DIYing it with TurboTax or handing it all over to a tax pro, you got this.
A couple quick resources before we close out. Again, if you're at all struggling and just want some guidance, call up some tax professionals and just see if you think working with them would be worth it. You can ask them questions about their rates and services and just see if you think that might be a good fit.
[00:39:00] And then honestly, it sounds really nerdy, but don't look past the IRS website for answering some of your tax questions. I know it can seem really intimidating, but actually some of the information there is really clear and approachable and it's not totally complicated, at least not all of it, so give that a try too.
If you like this episode, we would love if you could pass it on to a friend or family member. Maybe these tax conversations have come up as you're getting organized and you know of someone who is maybe struggling a little bit or just feeling a little overwhelmed. Go ahead and send them this episode and we hope they might find it helpful too.
[00:40:00] And then as always, if you have additional questions, we would love for you to send them to us at hello at thefinancegirlies.com. Who knows? You may hear them in a future Q&A episode.
That's a wrap on another episode of the Finance Girlies podcast. Nothing in this episode is meant to be taken as financial advice.
Cassidy Horton: Please do your own research and talk to a professional if you need advice. As always, if you enjoyed this episode, don't forget to subscribe, rate, and review. Love you. Bye.
