How Do I Stop Getting Wiped Out by Taxes Every Year?

Why does tax season feel like a surprise attack when you knew it was coming? And every year you promise yourself next year is going to be different, and then it happens again.That bill shows up, your savings disappear, your progress just resets, and you feel behind, you feel embarrassed, and you feel frustrated. Well, friend, if taxes keep wiping you out, you're not bad with money. You're just missing a system. And today we're going to fix that. Hello, friend.Ralph Estep Jr. Here. Welcome to Financially Confident Christian, where every day we work to break that cycle of financial shame and live with confidence.And today's topic is all about taxes. I spend a lot of time doing taxes, but today I want to share with you how to stop getting wiped out by taxes every year.Let's get right into today's question. This question comes to us and it says, ralph, taxes wait me out every time.And I feel like an idiot for not being prepared, but I don't know how to get ahead of it. It's this predictable emergency that keeps happening, and I'm stuck in the same loop. Scramble, pay, recover, and repeat.Ralph, how do I actually set myself up so that irregular expenses like this don't destroy my progress? I'm tired of feeling defeated by things I should see coming. Well, you know, they say there are a couple certainties in life, death, and taxes.But I love what you say in your question here. So I want to start with today's big idea. Taxes are not emergencies. Sorry to burst your bubble.They're scheduled obligations, and we've got to change our mindset with that. I deal with this. This time of year is tax season for me.I'm meeting with 8 to 10 people all day long, and it's amazing to me how many people say, well, Ralph, this is an emergency. I wasn't expecting this. You file taxes every year. If you work a job, you have taxes coming out of your paycheck every week or every two weeks.This is a scheduled obligation. So let's talk about how to fix that. First thing you've got to do, you've got to change the language. Stop calling it a surprise.This is not some sneak surprise attack. It's not a crisis either. It's just simple mad. Because when you label something as an emergency, as soon as you hear the word emergency, what happens?Your brain panics. You go into that mode of, oh, I got to figure this all out.But when you label it as a category, and that's really the pivot here, emergency to category. And when you label it like that, your Brain can plan. Because this isn't about shame. As I said, it's about structure.Well, let's get into the nitty gritty about how to make it work better. First thing I'm going to encourage you to do, create a tax vault.I do another show called the Content Creators Accountant where I work with content creators about how to fix their money issues. And I talk about this tax vault all the time. But guess what? It works great for individuals as well. Here's my encouragement for you.Open a separate savings account and name it your tax vault. I'm being intentional. My wording here. Not savings, not extra. Tax vault. If you think about it, I like those two words, intentionally taxes.Because hey, like I said, death and taxes. But a vault? Think about what you conjures up in your mind when you think about a vault. It's a place that you've set up, it's a fortification.And every time income hits, a percentage moves immediately before any spending, before any lifestyle choices, before anything else. And listen, this is really important. If you're self employed, it's not negotiable.If you're self employed, you don't have the benefit of somebody withholding taxes. But Maybe you're a W2 income person and you've got a little side hustle. Again, it's necessary to build that fund, that tax book.It's not about hoping, it's about automating obedience. And once you've built that tax vault, then decide the percentage once that goes into it. See, most people fall because they guess every month.Stop the guessing. Pick a percentage based on your situation. If you're unsure, start with 20 to 30% of the profit.If you're self employed, the exact number can be refined later. But you might be saying, groff, wait a minute, I'm not self employed, but I always owe it tax time. Now there's a couple ways to fix that.You can go to your employer and change your W4 form, or you can say, listen, I see that I owe $2,000 every year. Create a tax vault. And every time you get paid, put a certain amount into that. Because that's what's going to change the dynamic here.Because it's that indecision that is keeping you exposed. But if you have that clarity, it beats that perfection every day. Here's another thing I'm going to encourage you to do.Now, a lot of my clients don't like this, but I truly will stand on this ground. Pay your taxes quarterly, not emotionally.Because when you wait till April and we're not far away from April, you create trauma for your life because then it does feel like an emergency. You've got a short amount of time to pay. Uncle Sam or Uncle Uncle Sam not gonna be happy with you.But those quarterly payments break that fear cycle and it breaks it up into small manageable pieces. And when you do that, it builds confidence.I'll tell you one of the things that I see all the time, especially for my self employed clients, when they pay their quarterlies, they come into tax time and they are in good shape because they say to me, this is what they usually say. They say, ralph, I did what you said. I paid those estimates every quarter. Here's my proof of that.And when they do that, it turns tax season from panic into paperwork. Paperwork's not fun, but it's manageable. And the final thing I'm going to encourage you to do, add taxes to your monthly money meeting.Taxes should be discussed 12 times a year, not once, not at tax time. I see this all the time. A client will come in to get their taxes done. I look at their W2 and I go, we have a problem here. I never forget.I'll tell a funny story. It's about 20 years ago. I was working on a Saturday morning. Husband and wife had come in to get their taxes done. And they were school administrators.And I always start off with, hey, how are you today? I said, give me all your documents. I start looking through them and I looked at the husband's W2 form and I thought to myself, we got a problem here.He had zero federal withholding and they made pretty good money between the two of them. And I thought to myself, this is going to be ugly.Got to the end of the interview and I'm doing the software behind the scenes and I see they owed money. And I said to him, well, I got some good news and bad news. The good news is I've got your taxes just about done.But the bad news is you owe quite a bit to the irs. And I'm going to tell you right now what happened. I will never forget this.All of a sudden, the wife reaches up, she comes across and punches the husband just square in the jaw. Knocks him out of the chair and onto the floor. And she says, I told you not to go exempt, you idiot. Well, that's a funny story.Wasn't funny for him, but he waited till the end to review it. Yes, he had made a change early in the year. He got a bonus and he didn't want it to be taxed real High. So he changed his withholding.Well, guess what? He didn't check in with that again. He didn't look at his income. He didn't plan ahead.And when you look at it regularly, you don't have those oops moments. You don't get knocked out in the accountant's office. Funny thing, now whenever I tell people they owe money, I kind of back up a little bit.I'm like, guess what, yo? So some of my clients have said, ralph's got a tell. If I owe this year, you're going to notice he's backing up.But see, avoidance doesn't solve the problem. Avoidance just makes taxes scary. But visibility, it really makes them manageable. Here's the thing I want to encourage you with today.Predictable does not have to be painful. So here's your one step for today. I want you to go and open that tax vault account. That's it. No calculations, no spreadsheet yet.Just open the account and rename your future. And then we'll talk in the future about how to do that. Let's get right into today's Bible verse.And this is a Bible verse I've used many times on this show because it reinforces planning. And it's from Proverbs, chapter 21, verse 5. The plans of the diligent lead to profit as surely as haste leads to poverty.See, being diligent isn't being dramatic. It's disciplined planning before the pressure arrives. If you're waiting till April 15th to address this issue, all you're doing is building pressure.It's like my grandmother used to cook in a pressure cooker. If you don't release that pressure, it explodes. And for so many people, it explodes right at the time of taxes. So release that pressure.Build a plan today. How about we pray together? Lord, thank you that you're a God of order, not a God of chaos.And we ask that you would forgive us for avoiding what we should plan for. Forgive us for letting fear control our finances. And give us all clarity today. Give us courage to build systems instead of reacting emotionally.Help us to replace panic with preparation and shame with structure and avoidance with diligence. Let this be the year that taxes no longer steal our peace. And we ask this in Jesus name. Amen. Friend, I want to encourage you right now.You're not behind. You're just building differently now.And if you've got a question for the show about how to do things differently or something you're wondering about, I would love to hear your question. Go to financiallyconfidentchristian.com/question we'll put a link in the show notes. It's right on our website.I'm going to give it to you again, financiallyconfidentChristian.com/question thank you so much for joining me today. As we talked about taxes, I want to encourage you stay financially savvy. May God bless you.And you have a great day today.