Just like every other year, I found myself sitting across the desk from my CPA last week. My palms were sweaty, my mouth was getting dry as the Sahara Desert and I really needed to go to the bathroom.
I don’t know why I get so nervous about taxes each year? My CPA knows almost everything about my finances. He knows about my family because he fills out the forms where I claim exemptions. He knows about my savings and investments. He even knows about my personal income, again, because he fills out the forms for me each year. He even has to sign the form, stating that he has reviewed my case and, to the best of his or her knowledge, everything on my tax form is correct.
In reality, it is not the person preparing my taxes who makes me feel nervous, it’s the uncertainty of not knowing whether I will need to borrow money to pay the taxes I owe this year or, if my case is such, might I actually receive a tax refund this year?
While I usually have some idea about how much tax I will need to pay, I am often very surprised when I have the final meeting with the CPA each year. I often feel like I’m sitting at a Blackjack table in Las Vegas and I’m down to my last dollar, hoping for good news as the dealer deals me the cards.
These are not new feelings for most people. Shortly after the United States of America was founded, Benjamin Franklin famously commented: “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes…”
We all know there will be taxes due each year. We all know there will be an accounting of all the money and interest earned, of investments gained or lost from our portfolios. And, we all know we will need to report to the IRS.
Now, the other part of Benjamin Franklin’s famous observation is the death part. We have all had grandparents or parents die. We’ve all had friends and loved ones die from unfortunate accidents or in military service or some other unfortunate circumstance but did you know that the vast majority of us die from diseases. This year, with the COVID-19 pandemic, more of us seem to be aware of diseases that we normally are. I sure hope you didn’t lose a loved one to this crazy disease but by now, most of us are aware of the many unfortunate problems diseases can cause.
Just like with our taxes, preparations can be made to help our loved ones to deal with the uncertainties that come into play when a person dies. With taxes, we have an annual reconciliation with the government to prepare for. With death, the timing is unknown so most people don’t feel the urgency to prepare. Consider final expense insurance as a first step to be sure your loved ones aren’t dealing with your loss and the financial problems that come into play with your loss. As Benjamin Franklin explained, it is a certainty we will all pay taxes of some kind and it is a certainty that all of us are going to die.. We may not know when but we do know it will happen. Take a few minutes to make a plan for when death comes to you or your spouse. Believe me, you won’t want to have the terrible uneasy feeling of learning you have a terminal illness not being prepared.