“I’m doing my tax return on TurboTax and I just have a quick question. I wonder if there is something wrong because I’m not getting any money back”. – a caller yesterday
I pick up my own phone so sometimes I get these types of questions. Tax preparers tend to be irritated by calls asking for free advice. I certainly don’t blame them. These questions bother me because I have a pre-planned strategic response and because my business does support people who do their own tax returns on TurboTax.
My response was something like ”I can’t comment on your tax return but I can confirm that the #1 issue in this tax season is the shock that taxpayers face when they realize that their taxes are higher and refunds are smaller. Some will unexpectedly owe money this year. This is the result of pandemic era tax benefits ending”.
I advocate for an approach that includes tax planning combined with basic financial planning. This results in lower taxes, no surprises, and most important, faster growth of net worth. As a practical matter, an individual needs to have household income approaching $100,000 to reasonably afford this approach.