Personal Responsibility

Today TaxMama hears from lots of people – and all the questions have the same theme. “I overspent and ran up lots of debt and didn’t pay taxes. Now I’m in big trouble. What do I do?”

TaxMama answers Tax Questions

Dear Family,

I hate to start days looking at the fallout from irresponsible behavior. Folks running up lots of debt for junk they don’t really need and no longer have. Cutting their withholding or not making estimated payments while making a lot of money.

You enjoyed the trips, the dinners at prime restaurants, the orchestra seats at the best shows, the fancy cars (which are now essentially worthless), the designer clothes bought at premium prices (which can be sold, on consignment, for pennies on the dollar), or whatever the heck you did to consume $30,000, $60,000, $100,000 or more of debt.

And it makes me cry to remember a client whose father died several years ago leaving an estate worth over a million dollars – that she managed to totally deplete in less than three years with cruises, fancy meals and tattooing – until she had to sell her home and cash out her IRAs and spent that money too – and ended up flat broke.

And then there’s the guy who wants to live among wealthy folks – and had to steal from family and friends to support his lifestyle. He didn’t teach his children any responsibility either. They have produced dozens of children they cannot afford to support – and count on him to keep finding (often illegal) ways to maintain their living standards within their wealthy community. Do you know anyone like him? Besides the Madoff’s, of course.

This is flat out irresponsibility. Perhaps folks watch too much television, or see too many public figures who become notorious for ripping off the system big time – so they think it’s OK to do the same thing. “So what if I enjoy myself now, then abdicate responsibility and bankrupt my credit cards and tax debt? Big deal. Doesn’t everyone do it?”

Uh, no. We don’t. Most of us actually take responsibility for our actions. We pay our bills. Live, at least, close to our means. Manage to save enough money to buy a home, even if it’s not a castle. We forego that $5,000 trip – and take a local tour for under $500. We don’t show off the $3,000 purse or boots – that look so similar to the $30 knock-off from Ross, or Payless, or Target. Yet, we manage to have a great time, laugh, be happy and enjoy our lives. Even better, we don’t have that looming nuclear cloud of debt about to descend upon our lives.

Why the rant? Because it really hurts me when I can’t give a truly helpful answer. And because it’s time for you to look at your finances with an objective eye. If you’re on the verge of getting in trouble, you still have time to fix it. If you’ve been indulging your offspring, you still have time to rein them in and re-train them – and perhaps yourself.

It’s time to stop making major financial and life moves without consulting an advisor, like your tax professional – before you get into trouble. Please, get help – before it’s too late.

And remember, you can find answers to all kinds of questions about taking responsibility and other tax issues, free. Where? Where else? At TaxMama.com

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