Spring is tax time in California. Last week I diligently kept a running total of all of the taxes I owe for this quarter. Property taxes and estimated taxes are due next month. It is always a shock for me to see the numbers. Each year it costs more money to live here.
It requires financial discipline to have enough in liquid savings well before the bills are due. That cash needs to be liquid. For me, that means the money is stocks and CD’s is not used.
I double check my account balances daily, to be sure the checks have cleared. I also mark the items with a check in my checkbook register. It’s important to examine every detail before mailing them in, or paying online. Dates, social security numbers, and numbers must be accurate.
The accountant needs to be paid, and there are still all the regular costs of running a household that are occurring, as well. Staying disciplined with grocery purchases, heating, electric and water usage insures that there will be enough dollars to pay for the luxury of living in California.
How are you doing with your taxes?
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I used to do my own taxes, but, now, I get them done by a tax firm. Yes, I pay a fee to get them done, but, it is easier for me. I list the tax preparer fee in my monthly budget and put money aside for it. I took all my tax documents to the accountant earlier this month and have an appointment to go over the taxes and sign the documents, later this month (next week, actually).
ReplyDeleteI pay an accountant to prepare my taxes, too, Bless. She is excellent.
DeleteI check my account every single day, as part of my early morning routine. I have an excel file to keep a running record of how much spent and how much left and if, at the end of the month, there's anything left over, I pop it into savings.
ReplyDeleteUK taxes are not the same - I'm obviously not in the higher rate of tax and it come off at source through PAYE (Pay As You Earn). Local taxes such as council tax/water/etc, are paid on standing order at the beginning of each month.
I really like the feeling of being totally on top of it all and knowing what I have left and what I have saved. It's a form of security, isn't it? Not the only form but quite an important one.
xx
That's excellent, Joy. Yes, it is a form of security to stay on a budget and add to savings.
DeletePersonal Taxes are due on April 30th in Canada and for years, it was easy to dour own. But in the last 8 years, our incomes increased quite a bit, we reverted to working from home full time, we rented out our old home, then sold it after 5 years and then last Spring, I retired from my big job, but kept my small contract, so taxes were a worry. I'm so glad we've had an accountant to help us out and the best thing is her fees (reasonable) are tax deductible as an expense. Good move, as it turns out, for the first time ever, I owe taxes this year. BUT because our accountant did a quick calculation in December, we were able to move more money into my RRSP as my dh is getting a big refund, so he didn't need the tax deduction as much. Now I have no tax bill, and his refund was not affected.
ReplyDeleteAs a former banker, I do check our banking every day. So easy with online options and though everything is always just fine, I'm glad we know from day to day what our accounts are at. We also do a budget once a year to determine our expenses and set a goal for our savings. Works well for us, especially with life costing so much now!
X Chy
I can relate, Chy. You are wise to check your bank account every day. Thanks for your well written comment.
DeleteI am very lucky, as an employee in the UK, my income is taxed at source. This means my taxes are deduced from my wages before I am paid. No tax return for me and no fear that I won't have enough cash to pay taxes. I always check that my tax band and deductions are correct. We have council tax, which we pay monthly by direct debit, and that's about that. My tax returns back when I was still living in Switzerland were nightmarish to complete....
ReplyDeleteYes, mine were taxed that way when I was an employee in the US, too, Christina. Interesting about Switzerland...
DeleteDid my comment just disappear? Will check back later.
ReplyDeleteHi Christina, No, I got it. Thanks.
DeleteWe handle our taxes through Turbotax. Now that we are retired, our tax situation is so much easier. The Turbotax information is loaded in by our investment company. Typically, we try to adjust the withholding to exactly match what is owed-we will owe nothing and get nothing back. It never works, but we err on the side of caution. Every year we file as soon as everything is available-early February. Down here county property taxes are due on December 15. Merry Christmas!!!
ReplyDeleteThat's convenient that your investment company loads your Turbotax information for you, Anita. My accountant does the same thing.
ReplyDelete