How Do I Break Free From The "What If We Owe" Tax Spiral?

Are you dreading tax season? I mean, just the thought of having to get your taxes ready has just brought on a ton of anxiety to your heart and to your mind.But what if I told you there's a better way? And on today's show, I'm going to show you a way to create a plan and actually live in real peace, even in the midst of tax time anxiety and fear.Hey, friend, Ralph Estep Jr. Here. Thank you for joining me today on Financially Confident Christian.My goal on this show is to help you break that cycle of financial shame and really find confidence in your decisions. And today's topic is exactly that. We talked about the unexpected you owe and the unexpected refund the last couple days.But now we're going to get a little deeper and we're going to talk about that tax anxiety and how to end that fear cycle. So let's get right to today's listener question. Ralph, this time of year creates so much anxiety for me.I'm always worried that we're going to owe money on our taxes. Just the thought of even getting our tax returns done makes me nervous and concerned. Now, I know I shouldn't feel this way, but I do.How can I find peace with this once and for all? Well, first of all, thank you for sharing your question. It reminds me, I bet about 35 years ago I was doing tax returns.I was actually working for my dad's company at the time.And this fella came in to get his taxes done and he sat down at my desk and he said to me, he says, ralph, I don't know that you understand this, but this is, this is, this is such a huge anxiety thing for me. He said, in fact, I haven't filed tax returns in 10 years. And I said to him, well, what's going on? He goes, no, you don't understand.Like physically, Ralph, this makes me ill. Now, I won't tell you the whole story, but ended up he had a documented illness where he had this anxiety. Now, it may not be what you are suffering from today, but today I want to help you find peace.Because when you fear something, it's usually because you don't have a plan. You don't know what it is. So today, my big overarching goal is to help you build a simple plan that you can name it.Which leads me to the first thing we've got to do. We've got to name the fear. Now, this isn't a time to judge yourself most of the time when it comes to taxes.This is the situation and you can say this plainly. I'm afraid we're going to owe and I won't know what to do. That is probably 90% of the situation that most people tell me who have tax anxiety.They just don't know. They're afraid. Maybe they're scrimping and saving. They're living paycheck to paycheck.So many of us are in that situation, and so many of us, we have this fear because we don't know what to expect. So here's the first thing I want to encourage you to do. Replace that fear with, I shouldn't feel this. Stop saying that. It's okay to feel this.Replace that with, this is real. This is real fear. This is real anxiety. This is real concern. But I can handle it because see the difference there?It's one thing to have a fear and not let that allow you to function. It's another to say, you know what? This is real. This is a real fear.This fellow that was sitting at my desk, let me tell you right now, this was a real fear. I could see it in his face. He was clenched up, his eyes. I, I could see it.But I said to him, so I said to him across the desk, I said, we can handle this. So let's get to the second thing. We've got to turn that O into a number. When you just say, hey, we might owe. Oh, to me, doesn't mean much.I've got clients that owe tens of thousands of dollars when we file their tax returns for them. Hey, they're expecting it. They know what's going on. So that's what we need to figure out. This is the time to get an estimate.Look at last year's tax return, look at this year's pay stubs and income, and just say to yourself, if you listen to the show the other day, I said, one of the things that usually affects your tax refund or if you owe is your income. Well, if your income changed, do an estimate.One of the things that I think is a great idea to do, and I encourage my clients to do this, it's one thing to do tax returns at the end of the year. Now we're in tax season right now. If you're watching this when on the scheduled day it's coming out, we are in the midst of tax time.But one of the things that I tell clients almost every day is, let's have a meeting in the fall.Let's have a meeting in the early fall, September, October, and let's see what things look like if you're one of those people that's had a major life change or a job change, this is a great idea because then you can reduce that fear. There are a lot of clients that I meet with throughout the year where we're taking a look at where things are, what I call a snapshot. Where are we?We're not looking for perfection, but they might say to me, listen, Ralph, I can afford to owe about $1,000, but if it's more than that, I've got to make some changes. Well, if you wait till the end of the year, you can't make those changes. So that's one of the things, you know, put a number there.Next thing I'm going to encourage you to do, make a simple if we owe plan. It's going to happen. Sometimes it happens to the best of us. I remember I've talked about this on the show.The other day when I filed my first tax return, I owed money. I wasn't expecting it. But this is the time to have that plan that if we owe, decide how much can you pay on filing day?How much is in that tax buffer? We talked about that the other day. If you missed that show, go check it out.We talked about building that tax buffer, and if you can't pay it all at once, you file anyway. A lot of people fear their taxes because a lot of people know I'm going to owe again.They know something changed, and so what they do is they get stuck in this state of paralysis. He don't do anything. Well, here's the problem with that logic. Your taxes are due by April 15th. Whether you owe or you don't owe, guess what?You still need to pay them and file them. The thing I tell clients all the time is, file your returns. Let's draw that line in the sand. Even if you owe, I get it.If you owe, we'll set up a payment plan. We'll adjust our withholding. We'll do those things I talked about the other day.But just don't live in that paralysis of that fear and say, well, I'm just not going to file at all. Just going to pretend like it's going to go away. That's what that client did with me for year upon year. And then the problem is it just festers.It's like that sore that just won't heal. It just keeps on getting harder and stronger and harder and stronger. But this is the time to fix that.And then you've really got to move into the next stage of this. You've got to remove that trigger. And I talked about this a little while ago.This is a time to schedule that, that tax appointment where you can go and say, can I prep this? Take a look at this thing first. And maybe right now you're thinking, you know what, Ralph? Here's what I can do.I'm going to go pull all my tax stuff out.I'm going to gather my basics, my W2s and 1099s, way to copy my last year's return, get my ID, all the major deductions, and I'm just going to kind of throw it into the software and see where I land.The earlier you do that, the better, because let's say it's March, let's say you're listening to this as it comes out and you do your, what I'll call your draft tax return. You go, oh, man, I do owe some, some money. Well, here's the thing.If you know that, then you've got between now and April 15th to do something about it. You can start to save a little money, maybe look for some other deductions, maybe take it to a tax professional and say, listen, I did this myself.I do a lot of these returns every year work. Somebody will go and do it themselves and they'll come in and say, ralph, listen, I did my return myself, but man, I can't owe this. Is this right?Unfortunately, a lot of times it is right. But maybe I can help them fix it for the future. Because when you have that momentum, it breaks that dread. That one small step can break that spiral.And another thing I'm going to encourage you to do is prevent the repeat. This is what a lot of people say, you know, I file my returns at every year I owe. Well, guess what? If you owe every year, the system is broken.Your system is not working. You got to change the system. I've talked about ways to do that. Adjust your withholding, make some estimated tax payments throughout the year.And these don't have to be big numbers. They can be little, small, what I call doable amounts. Create that tax buffer savings line that we Talked about.Put $25 or $50 from every paycheck because peace will grow when the future has padding. And you've got to really build that padding in. And here's my, my one line of encouragement today. You're not behind. Your next step is enough.So take that step today. And here's what I'm going to encourage you. Today's big win. My big takeaway for today is I want you to write this sentence down.If we owe, we will blank whatever that is and fill in one plan. If you owe, hey, it's not a problem. We've got money in our emergency fund, we got money in their carve out tax plan. We can handle this.Or we're going to file. We don't have this much money. And we're going to set up those payment plans because here's the thing about our brain.The way brain chemistry works, your brain relaxes when it knows there's a path forward to. And that's the big takeaway from today. Build that path forward. Because when you have a path, it breaks down that fear once and for all.Well, let's get to our scripture verse and you know, I always want to land some scripture here. That's one of the benefits of having a finance and faith show. Well, this one comes to us from Isaiah, chapter 26, verse 3.And it says, you will keep in perfect peace those whose minds are steadfast because they trust in you. I just love this verse. I want to read it again because I just, I want you to really get your arms around this.You will keep in perfect peace those whose minds are steadfast because they trust in you. And if you think about it, this verse helps because tax anxiety pulls your mind into these endless loop of what if scenarios.And listen, I've been there. I see this almost every day during tax season.I can see the wheels going off as I'm talking to a client and I'm looking at the screen and I'm going to tell this client they owe money. And I can just see that the wheels are going up. They're in those what ifs.But God's inviting you to something deeper, a peace, a steadiness that we're going to trust in him. And yes, it might be a rough season. It might be. We're going to have to go into a payment plan.We're going to have to take some money out of our emergency funding to make some changes. But God's saying there, you know, keep perfect peace. If your minds are steadfast, build those plans and trust in him. Well, let's pray together, Lord.You see the anxiety that rises up around taxes and the real fear of the unknown. And you see how quickly our minds run to these worst case scenarios. We're playing them out in our head, Lord.So give us wisdom for today, Lord, and peace for this very moment. Help us to turn fear into a simple plan and a clear next step. Teach us to trust you.With provision, Lord, and with timing and with the outcome, even if the number isn't what we want right at this moment. And help us keep our minds steady on you when the worry tries to take over. Help us to be steadfast in our trust for you.And we ask this in Jesus name, Amen. Listen, that tight feeling doesn't get to lead you. You can stop that right now by building a piece and a plan.And if you've got a question for the show, I would love to hear your question. It's what feeds me. It's why I do this show every day. I want to answer your questions. I want to help you break that cycle of financial shame.If you've got a question, go to financiallyconfidentchristian.com/question. I'll put this in the show notes, but it's financiallyconfidentchristian.com/question. i want to hear from you. Just share what's going on.Even if you might think, hey, this is a trivial thing. It's not trivial to me. So send in those questions. And I just want to thank you for joining me today. As I always say, stay financially savvy.God bless you. And you have a great day today.