How I Learned to Stop Worrying and Love Doing My Taxes (Well, Maybe Not Love)
Like so much else in my life, I became self-employed pretty much by accident. I was in my early 30s, eager for a career change; I knew I wanted to write for a living and — this was about a decade before being a ‘digital nomad’ was admirable and not taboo — I wanted a job I could do anywhere.
I didn’t know anything about marketing (if you ask my Hubly coworkers today, I still don’t), but I’d been forced to sit through a few episodes of Mad Men and was able to talk my way into some small copywriting contracts. From there, things grew — I put together a portfolio, made connections with agencies and before long I had enough work to support myself, with enough time to do the things I really wanted: travel, play in a band, run a small art gallery into the ground (long story).
Initially, I took almost any job I could (though I did turn down a contract from a sketchy nonprofit I later found out may have been a money laundering front). But over time I gravitated towards tech and found my niche in enterprise software. You know what they say, the heart wants what the heart wants.
Things were going great, but all the while there was a nagging thought in the back of my mind: you haven’t done your taxes in years, you idiot.
Eventually, the nagging became un-ignorable; I was making enough money that I knew I would owe the government something. At the same time, my anxiety made figuring out and facing how much I owed feel impossible. Though I was doing comparatively well, I was still earning just around the median income for the high cost of living city I lived in. Giving up even a little of my income would be painful; but every day I didn’t take action, the anticipation and uncertainty around just how much I may owe made it worse.
After putting it off, making lame excuses, (too cloudy outside, needed to take a spa day) I finally went to visit the CPA around the corner from my apartment. As it turned out, the guy kept weird hours — I would later learn that he typically got into the office around 8 or 9 PM and worked through the night. So I sat and waited, while his office manager glared at me. I had committed to solving this problem and wasn’t going to let something like a nocturnal accountant stop me.
When I finally met with the CPA, I found him to be competent and cheerful. He took the time to understand my situation and assured me he’d seen much worse. And, most importantly, he told me something that went a long way towards demystifying things; in his words, tax prep required two things: knowing how much money you made, and knowing how much you spent making that money.
A simple explanation from a knowledgeable professional suddenly made the problem solveable — much more so than the garbled mix of dubious, often contradictory information I was finding online did. I could get those numbers, and once I had them, my CPA walked me through what I could and couldn’t claim; together, we built a business expense spreadsheet that put everything I needed in a single doc.
After all that, I owed money, but a manageable amount. It turned out I had some unclaimed credits from my more fallow years that offset the burden. I got on a quarterly plan that spread my payments out over time. And best of all, once I knew what I was doing, next year’s tax prep was a lot less stressful.
What Can Advisors Learn from This?
At the time, my story felt like a unique byproduct of my own unseriousness — I was caught somewhere between being an entrepreneur and an employee, with none of the ambition of the former and little of the security of the latter. But in the years since, not only have I matured, I’ve also come to see my career progression as very much a harbinger of the way we work now.
More people I know are, for a variety of reasons, supplementing or forgoing traditional salaried jobs in favor of contract and gig economy work. Advisors and CPAs need to realize that the average 30- and 40-something may have a more complex tax picture than in years previous. If you want to attract new clientele, you will need to bring a healthy amount of patience and empathy. Recognize that not everyone moves through life in a straightforward manner; most of us are navigating an uncertain, unstable economy, and our own unstable, uncertain lives.
Ultimately, the only way I was able to break my mental block around taxes was to sit down with an expert and talk it out. As an advisor, it’s important to remember that people will always want the reassurance that comes from a personal connection. The best thing you can do is to make time for your clients — get to know them, understand what keeps them up at night, and work to find solutions that make sense for them.
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