Money Slackers: So how did your taxes go?



Myles Ma

Myles Ma

Senior Managing Editor

Myles Ma is a health care expert & personal finance writer for Policygenius. He edits the Easy Money newsletter.

Published April 5, 2019|11 min read

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Welcome to Money Slackers, a regular discussion among Policygenius staffers about money. We held the following conversation in a Slack chatroom. It's been lightly edited.

Myles Ma : Hello, Slackers. We are back this month to talk about taxes. I know you were all worried, so I want everyone to know: I did mine this weekend. To start off: Has anyone NOT done their taxes? (If not, read our 2019 taxes walkthrough.)

Blayne Smith : I haven’t.

Myles: BLAYNE. Why the delay?

Blayne: Because I always owe money.

Patrick Hanzel : I don't owe money but I guess if I did I’d likely be more inclined to delay.

Myles: Just so the readers know it is April 3, which is late enough to make me very nervous. Blayne, have you not started at all?

Blayne: I've started.

Myles: OK, that's good.

Blayne: Sorting out how much we can deduct for my wife's 1099 work. Which swings how much we owe a whole lot.

Anna Swartz : Blayne has a new baby! Cut him some slack.

Holden Lee : I'm more or less done. Relying on my certified public accountant to get back to me. I gave all my info to my guy. I've done my part. Before real estate, stocks and kids, taxes took a few hours. Now it takes weeks!

Anna: I got my refund already but I have to pay the accountant still. He is my dad's accountant actually, but I am paying for his services MYSELF for the first time.

Holden: I haven't gotten a refund since... my wife started at Google.

Jeanine Skowronski : My dad delays every year because he always owes. And he's especially delaying this year because the new tax law is costing him. He is very mad about it. I should have invited him to this Slack.

Myles: So a couple of people mentioned accountants, but does anyone do their own taxes?

Jeanine: I do!

Laura Reineke : Does TurboTax count as "me" "doing" "my own"?

Holden: TurboTax counts as “do it yourself” in my book.

Patrick: I do mine. I didn't previously when I was an adviser with a lot of write-offs though.

Blayne: Going for TurboTax again this year.

Anna: My wife has done hers in the past but this year we filed jointly and used the accountant. I think she wants to go back to TurboTax though.

Myles: I have used TurboTax in the past. I used H&R Block this year for the first time. Both were boring and I don't think I will do them on my own next year.

Hanna Horvath : Did you expect either to be interesting?

Myles: I guess not, but my threshold for boredom is lower.

Patrick: How was H&R Block? I’m just a TurboTax guy.

Holden: I used to do H&R Block, but didn't see much value add versus TurboTax.

Myles: Patrick, It didn't seem that different in cost or fun.

Jeanine: If you don't use software, you'll have to pay a CPA and that's ... more expensive. So you're going to pay to ... not be bored? EXPLAIN THIS TO ME, Myles!

Myles: Isn't that one of the big uses of money? Paying people to do things you don't want to do? Freeing up leisure time?

Jeanine: But you're talking a pretty big gap in price. So ... do your taxes and go on vacation after. That's my advice.

Myles: People who use accountants, what pushed you to hire help? (other than boredom)

Anna: Taxes intimidate me. I wanted to hire someone to make sure I wasn't messing up.

Blayne: I wanted to hire someone so I could blame them if I deduct too many things

Patrick: Blayne, that’s a good strategy.

Holden: Yeah, it's good to CYA re: taxes.

Myles: It is intimidating, even though the IRS has no budget for auditing people anymore.

Holden: There are flags for getting audited... I hear if you have a “home office,” that's a flag.

Jeanine: New York City is kind of auditing me.

Myles: Explain, Jeanine.

Jeanine: They won't pay my return unless I send them additional documentation. Namely, my W-2 to prove how much I had withheld last year. And their website won't recognize me, so I have to call them and figure this all out. Which I've been procrastinating.

Patrick: Oh, yeah, they did that to me too. I had to send in all my W-2s. I guess this is a real question... how much does your CPA help if you get audited? Do they do everything and take the blame if something isn’t right?

Holden: Anyone know their impact on their taxes due to the new tax laws? “Blue” states residents lose overall, no?

Jeanine: It's hard for me to gauge because last year I only paid property taxes for half the year and my filing status changed from "single" to "married" but I can say that I was not able to deduct everything I paid in property taxes this year. Which is frustrating since I also just got a notice that my property taxes are going up. By a lot. I will reiterate that my parents — who own property in Pennsylvania and New Jersey — owe much, much more as a result of the new tax law.

Myles: OK, so how did everyone's taxes turn out (who got them done)? I am supposed to get a decent refund.

Laura: My refunds (state and local both) are way higher but like Patrick I had to send in my W2s.

Jeanine: Maybe one of you can show me how to use New York state’s terrible website. I'm about to fax them my W-2s.

Anna: My refund was higher than last year but I got laid off in 2018 and my severance was taxed like a bonus.

Holden: I am not looking forward to the final balance due.

Hanna: QUESTION: Would you rather get a big refund or no refund and bigger paychecks?

Jeanine: Big refund. Every time.

Anna: Yes.

Jeanine: I know that's silly.

Anna: It feels like free money.

Hanna: OMG what? I would rather have bigger paychecks. Because ... you’re giving the government an interest-free loan.

Myles: I would also rather have bigger paychecks.

Patrick: I’d rather get a refund. Financially I know that’s not the most value, but it feels better.

Myles: Pat, that surprises me! A dollar today is worth more than a dollar tomorrow after all.

Holden: Yes, bigger paychecks are better... if you don't spend it.

Anna: Getting a refund is like finding $20 in your jeans pocket. You don't really have any more money but it's still nice.

Patrick: It’s forced savings is how I look at it.

Holden: But forced savings at 0% interest. Bigger paycheck + not spending = better value.

Patrick: I’m not that mentally strong.

Jeanine: Do you save your refund when you get it, Patrick?

Patrick: Yes I do. But basically it’s going into an engagement ring fund.

Myles: AWWWWWWWWWWWW CONGRATS PAT! My dad was mad that he's not getting a big refund, and I tried to explain the bigger paycheck thing and he said, "I don't feel that." Which I guess is the crux of it.

Holden: It is interesting how people's FEELINGS factor into taxes. And how taxes are perceived as theft or citizen's duty or whatever.

Myles: Holden, don't feelings factor into all sorts of financial decisions though?

Holden: It's one thing to acknowledge feelings, but then a whole another thing to base FINANCIAL decisions on them. I think “feelings” is the main reason why we keep financial advisers in business. Does anyone feel GOOD about paying taxes?

Hanna: I would if I felt like my money was going to something that benefited my life.

Myles: Maybe that's one reason people like refunds? They feel like they get something out of the effort of doing their taxes.

Patrick: It’s one incentive to do them early if you know you are getting a refund. GIVE ME MY MONEY!

Blayne: I don't mind owing money, but for 1099 work specifically the math never makes sense to me so it feels bad. When I add the 1099s to TurboTax the shift from refund to amount owed can be very jarring. And the shift feels disproportionate to the amount of income.

Jeanine: I feel like you need a CPA, Blayne. Myles does not. But you definitely do.

Blayne: I do need a CPA. But I think I waited too long to call one.

Anna: Well, mine is done with my taxes so you can call him.

Blayne: OK, DM me Anna.

Myles: You'd be surprised! There is a man on my street dancing while wearing a Statue of Liberty outfit right now advertising tax services. (Editor’s note: Seriously, my local paper wrote about him.)

Patrick: I hope that’s not the actual guy doing the taxes.

Blayne: I hope it is.

Anna: He's too busy dancing.

Myles: Did anyone notice any changes from year to year given the new law? Or was it the same old boring taxes? For example, the standard deduction is much bigger, so it really didn't feel like itemizing was worth it for me.

Jeanine: I itemized ... because my mortgage interest and property taxes are a thing. Now and for the next 28 years.

Patrick: Standard.

Myles: Aside from paying is there anything you guys super hate about taxes? For me, doing them myself, it's obviously the tedium, but also the anxiety that I'm screwing up.

Blayne: For me and the 1099 stuff, I always get a little anxious that I'm overpaying. By the letter of the law, it's pretty obvious what to do, but I've also heard from others that I should deduct more expenses. So there's an element of feeling like I'm paying more than my share, or at least more than others in similar situations do.

Patrick: Since I’m now just W2'd with some basic 1099 income I don’t mind doing them. I did mine in like an hour.

Myles: Woah! It will probably take you longer once you're married.

Holden: And have kids and assets and liabilities.

Patrick: Haha yes.

Hanna: The future is bright for Pat re: taxes.

Myles: At this point, is there anything you already know you want to do differently next year? For example on the magazine we always yell at people to check their withholding. For those who have not read the article, withholding is basically how much you take out of your taxes every check for taxes.

Hanna: Self-promotion I see.

Holden: Always No. 1 baby.

Anna: Next year, if my wife wants to do it all herself on TurboTax... I will let that happen.

Myles: What is her motivation?

Anna: Our taxes are pretty simple so we could save money by doing them ourselves. And she doesn't mind I think.

Jeanine: I would like — and this is more of a money goal than anything else — but I would like to max out 401(k) deductions. And possibly take advantage of the individual retirement account deduction. Every year I say "I'm going to put $5,000 in my IRA to lower my taxable income." And every year I ... don't do it.

Myles: What is stopping you?

Jeanine: I get very uncomfortable when my liquid savings dip below three months of expenses. And, this year, because I had to replace my roof, depositing more money into an IRA didn't feel like an option.

Patrick: You are following financial planning 101!

Jeanine: Thanks, Patrick. I try. Most of the time.

Holden: Oh, speaking of deductions... Max out 401(k), IRA, Roth IRA, 529. And flexible spending account.

Myles: No health savings account?

Holden: HSA is for high-deductible plans, right? Can't take the risk with kids.

Blayne: Holden, do you want to do my taxes? Seems like you know your shit.

Holden: I did a lot of research back in the day because I was stung one year by the ridiculously huge amount we had to pay.

Patrick: OK guys I have to head out for a meeting. Sorry to leave the party! One final word of wisdom: A tax return feels great.

Myles: One final final word of wisdom: Blayne do your taxes you're almost out of time

Blayne: I have plenty of time. They're due April 30th right?


Image: Phillip Blackowl