It’s tax time
By Thomas E. Zordani
Preparing your taxes—the thought can make one wince.
It’s like getting ready to see the dentist for a root canal (no offense intended to dentists or their trade). However, Scripture does say “render unto Caesar what is Caesar’s.” Paying taxes is a necessary un-pleasantry. That said, we should prepare them well, because Scripture also says, “for a person is a slave of whatever overcomes him” (2 Pt 2:19b). It is wise to avoid being a slave to anything, except being a slave to Christ!
This column will offer some food for thought in your task of preparing your taxes so that you will not be “overcome,” so that you are able to keep more of the fruit of your labor, and as a steward, that you may better use the resources you have been blessed with.
Understand we’ll be taking a wide view of what “preparing” means.
Perhaps you have discovered or will discover soon enough that you didn’t do your best job preparing for this year’s taxes. In that case, learn from your mistake (as Proverbs 10:17 states) and commit to doing better next year.
In preparing your taxes there is the actual end-step of sitting down and pouring through statements, receipts and forms to organize them in such a way that they are useful for the task at hand (whether you’re doing your own taxes or having a professional prepare them). This means you must first have the statements, receipts and forms to pour through, and have some system to file and store them in an orderly and logical manner; such as a container, box or folders. If you wish to avoid potential future problems with “Caesar,” it’s necessary to keep the documents for any deductions you have claimed for at least the last seven years.
Now, a brief comment to those who look at filing taxes as a good thing because they usually receive a refund: receiving a refund is not a good thing! It means you have “over-rendered” your taxes. You are allowing Caesar to use your money for free!
Additionally, in these times of budget and debt crises, is it wise to let Caesar (local, state or federal) decide if, and when, you will receive your tax refund (money that you have “over-rendered”)? If you don’t think this will or can happen, just talk to the people in the states of Illinois and California.
I’m an advocate for rendering unto Caesar his just due—but the least amount that I am legitimately required to render. This, too, brings me to the point of taking a much wider view of “preparing.”
Proper preparation involves wisdom and contemplation, diligence and discipline in your daily actions. Do the daily decisions you make with your money really reflect good stewardship? For instance, do you have debt? Credit card debt, student loan debt and most other debt, including the interest on that debt, is not tax deductable.
Proverbs 22:7 tells us “the borrower is the slave to the lender.” So why have debt? (Remember 2 Peter 2:19? A person is a slave of whatever overcomes him?) Are you overcome with debt?
I’ve had discussions with people about whether it’s wise over-all to pay off one’s mortgage and give up one’s mortgage deduction. One family was going to spend about $8,000 on mortgage interest for the year to gain approximately a $2,500 tax break. Does that make financial sense? Once I showed them the numbers, the decision was clear. If you are going to give away $8,000, give it to the Church, give it to the poor! You will still receive the $2,500 tax break, but which decision best serves God’s kingdom?
Finally, business owners and others shouldn’t overlook items such as cell phones, phone and Internet services, mileage, computers and computer software, office supplies, etc., which can become potential tax deductions. It is always wise to consult with a professional regarding these matters.
So don’t be overcome, enjoy the fruits of your labor and manage your resources better each and every day, by being prepared. Go, therefore, and prepare your taxes!
Thomas Zordani is founder of Faith Finances, a Catholic Bible-based personal finance company.