Don’t Marry a Youngest Child

I wanted to write about my grandmother’s advice on not marrying a youngest child. I wanted to talk about how, even though she was happily married for over 50 years to a youngest child, she still understood the difficulty of putting up with the baby of the family. I wanted to mirror that with my own marriage where both my husband and I are youngest children, and talk about how I now understand what she had been telling me for all those years.

I started this post over four months ago. It’s something I’ve wanted to talk about for a long time and I just can’t seem to figure out how to get it out. I decided to revisit it again this week, but it just ended up seeming too forced and I came off way too self-important (which, funnily enough, is a result of my being a youngest child).

So forget what I wanted to say. Here’s what I’m going to say:

I’ve mentioned in previous posts (here and here) that I am a youngest child. I think that nearly all of my personality traits stem from this fact and, for the most part, I’m okay with that. It’s true that I am selfish, but that selfishness has led me to stand up for myself in situations where I wasn’t being treated fairly. Because I am often thinking about myself and my own well-being, I very rarely get taken advantage of or used by others. It’s also true that, as a result of being a youngest child, I’m stubborn…and impertinent…and constantly feel like I have to prove myself. And those traits occasionally antagonize others.

I’m painfully aware of all of this.

But at the same time, I’m a big believer that there’s no such thing as a true virtue or flaw. There is good and bad in both virtues and flaws alike. As mentioned above, while being selfish isn’t exactly a good quality or something to be proud of, good things have stemmed from it nonetheless. Another trait of mine that has resulted from being a youngest child is that I’m very driven. Growing up, I always felt that I didn’t get enough credit for my accomplishments, and so I worked extra hard to receive accolades. Being driven is usually considered a virtue and I won’t deny that it has benefitted me many times over, in both my career and my relationships. However, being driven has also led me to create competition where there shouldn’t have been any; it has led me to resent those that I can’t beat; it has propelled me into depression and apathy when I couldn’t meet the expectations I set for myself; and it has caused me to go after things that I didn’t really want just to prove that I could get them.

My husband and I fought a lot our first year of marriage. Like, a WHOLE lot. And the overarching theme of almost all our fights boiled down to one thing: we are both youngest children and want to be acknowledged. We were both overshadowed by an older sibling for most of our existence and the effects of that are still prevalent more than a decade after living in the same household as said sibling. We’re both bull-headed and self-interested and just want to be heard and considered. And once we figured that out, our fights significantly decreased. While the fights haven’t and likely never will fully cease, they have become more tolerable, which is really all I can ask for in terms of marital squabbles.

In my grandfather’s case, being a youngest child meant that he always expected to get his way. There was a relatively large gap between him and his closest sibling and as such, he was very much the baby of the family in every respect. In the 20 years that he and I shared this planet, while I loved and adored him, I saw this side of him all too often. And maybe this is why I was the closest with him of all my grandparents, because I saw myself in his actions. Because I recognized his youngest child syndrome in myself.

My grandmother passed away on March 31st this year. It was smack dab in the middle of busy season and added yet another burden to my already overloaded shoulders. In the days that followed, amidst the last-minute travel arrangements and the harrowing reminiscences of her life, I kept wondering what advice she still had yet to give me. Coupled with that were the flashbacks to my grandfather’s passing, in which I missed his funeral because I was studying abroad in Spain and couldn’t afford to make it back in time. And it is because of these memories that I wanted to get my grandmother’s advice out into the world, even if the advice was mostly in jest on her part.

My grandmother showed me that it is possible to love someone even when there are things about them that drive you nuts. That is the biggest lesson I have taken into my marriage and I will be forever grateful to her for teaching me such an important truth. I continue to miss her, but I know that her guidance will endure throughout my marriage, and whenever my husband is on my last nerve, I can think back on my grandparents and remember how happy they were, even when they annoyed the hell out of each other.

 

 

 

 

What I’ve Learned About Tax

Yesterday I was working on a tax return where I had to allocate rental income across two states and couldn’t figure out how to get the correct amount to show up on the return. After doing some research, I finally figured it out. I showed my partner and she was so happy we had solved the problem. Then she looks at me and says, “does this mean we’ve been doing it wrong all the other years?”

And this is when I realized that nobody, not even CPAs (certified public accountants), actually knows what they’re doing when it comes to taxes.

Ok, maybe that’s a little harsh. It’s not necessarily that these supposed accounting specialists don’t know what they’re doing. It’s more that tax is a fluid subject, meaning that it is open for interpretation. Also, there are a lot of rules that would be impossible to memorize, and there are also a lot of software issues that have to be overcome in order to make the final return agree to all the rules. It’s so bad that I have often felt like even my superiors have no idea what’s going on and are just doing things by the seat of their pants.

And we’re the people that you all trust to do it right! That makes you feel good, huh?

I just finished up my fourth busy season and in that time, I have learned a thing or two about preparing tax returns. For your reading pleasure, I am going to share this knowledge with you, in hopes that it will help you better understand what your accountant goes through while preparing your return. Get excited.

1. The people who do your taxes don’t have all the answers

This is an important one and something that I touched on in the above paragraphs. As I mentioned, there are a lot of rules in the tax world, and each of these rules has its own subset of rules that apply to most every specific case you can think of. So while I may have gone to school for five years, have two degrees in accounting and have four years experience in the field, I haven’t even scratched the surface. So when you call me about that house you just bought and sold in New Mexico and ask me how this is going to affect your tax return, don’t expect me to be able to answer immediately. Don’t even expect me to be able to answer within 24 hours. I’m going to have to research the shit out of a whole lot of really boring material in order to even have an idea of how New Mexico’s taxes work. And on top of that, I’m going to need way more information from you before I can figure out how this will affect your return.

First, I would need to understand how you’re doing income-wise as compared to the prior year. Did you get a pay raise? Have your interest and dividends from investments gone up? Have you taken out a second mortgage? And since you’re probably calling me about this in August and your next tax return will cover the period from January to December, I’ll also need an estimate from you of how you think the rest of the year will go.

On top of that, I’ll need the nitty gritty specifics, such as dollar amounts involved in both the purchase of this house and the price it was sold at, in addition to all the expenses incurred on your part. Then I’ll need to know how much in taxes you’ve had withheld from your paycheck so far this year, to get an idea of what your overall withholdings for the calendar year will be. I will run a projection and after all of that, I’ll come up with a VERY rough tax return, based on estimates and incomplete information that you have given me, and I’ll use that to guess what your eventual tax due will be. Basically, I’m creating an estimate based on estimated data. If I’m even remotely close by the time I actually prepare your taxes, then I consider that a win.

2. You are not my only client

I get it, in your mind, the world revolves around you. But here’s the thing: during busy season, I work on anywhere from one to fifteen returns every day. Even if I prepared your return three days ago, I’ve likely touched 20+ returns since then. I don’t even remember the return I worked on three hours ago; you really think I’m going to remember the specifics of a return I worked on three days ago?

Another thing to consider is that I’m not the only person working on your return. After I’m finished, the return goes to my partner for review, and she’s reviewing returns from me and two of my colleagues, so she has three times the clients that I work on. So even though I may have finished your return three days ago, she likely hasn’t even had a chance to look at it yet. Once she gets a chance to look at it, she’ll inevitably have review notes for me (because hey, I’m not perfect and I don’t know everything), and I’ll get the return back and make changes. Then the return goes back to her, where she STILL might find more changes that need made. We may end up going back and forth three or four more times before this return is signed off.

So when you call me randomly and ask the status of your return, I have no fucking idea. Even if I DO remember working on your return (which, let’s face it, I probably don’t), I haven’t a clue of whether or not my partner has looked at it yet. I may have finished my first run through with your return two weeks ago, but it might still be sitting untouched on my partner’s desk for all I know. I’m not too concerned about it, because I have about forty more returns piled on and around my desk that I’m working on getting a first run or second run or fifth run through. The deadline isn’t for another month. Stop calling me.

Also, I’m charging you for this phone call.

3. I’m charging you for everything

I live and breathe billable hours. Seriously. I have a quota that I have to meet each week and each year. Any time of mine that is not directly billable to clients is deemed worthless by my employer. So if I have to sit on the phone for 20 minutes answering your relentless questions, you bet your ass I’m charging you for it. Even if I didn’t touch your return at all during that time, even if most of the conversation consisted of you droning on about your kid’s upcoming graduation or your recent divorce, I’m charging you for it. Any minute of my time that you take up, I’m charging you for it.

In addition, any extra work I have to do because of your laziness or disorganization, I’m charging you for it. You just handed me a shoe box filled with receipts with no explanation that I now have to go through piece by piece? You chose not to fill out our handy tax organizer and just stacked your documents willy-nilly inside an envelope? You’ve lost your property tax receipts and now I have to go to the county auditor’s website and search for you by name and parcel number to see what you paid? I’m charging you for ALL OF THAT.

Here’s a tip: do as much work as you can yourself. If you’re worried about my fee, then shoulder some of the labor. You run a small side business? Keep track of income and expenses in excel and print me a summary. You gave donations to thirty organizations and have forty-five pieces of supporting documentation? Make me a summary. You had medical bills from three different hospitals and eight doctors throughout the year? MAKE. ME. A. SUMMARY. You should still give me all those documents and receipts, but all of the time it takes you to summarize them is time that I don’t have to spend doing it. And my time likely costs a lot more than yours does.

4. I’m totally judging you

I often wonder if people ever think about how their accountant judges them. For about 90% of the returns I work on, I’ve never actually met the person (my partner has met them all, but as I’m just a minion, I don’t sit in on too many client meetings). So my whole view of you comes from the documents laying on my desk.

Case in point: I worked on a client this past year who ran a small side business buying high end fashion items (clothes, purses, etc) in New York and reselling them at markets. She was one of the clients that always complained about her fee and she even fired us this year, only to rehire us a month later when she realized no one else would do her work for our price. Preparing her return consisted of going through her monthly credit card statements and organizing them in a spreadsheet to come up with total purchases, sales, expenses, etc. As you can imagine, it took some time to create this spreadsheet (she could have saved money by shouldering this work herself, but she refused to, and then couldn’t understand why we charged so much). While going through her statements, I noticed that she had a cumulative bill on one card of over $6,000, yet each month she was only making the minimum payment on the card, which was maybe $150 or so. As I made her spreadsheet, I had a column for “interest expense paid” and I quickly realized that she was spending anywhere from $100-$300 a month on interest alone, due to this large bill that she was only making the minimum payment toward. Now, our total fee for preparing her return was MAYBE $500, and it was likely less because of how much she complained. Yet she willingly paid over $2,000 last year in INTEREST.

I’ve never met this woman, but I have judged the hell out of her.

Another case in point: this year I prepared returns for two brothers whose mother recently passed away and left them with a very large inheritance. They each had gross income of over $1 million. One of the brothers had charitable contributions of over $600,000 for the year, and the other brother didn’t even have charitable contributions. He grossed over $1 million and didn’t give a dime to charity. Now, this might be specific to just me, but if I see that you made that much money and didn’t give anything to charity, I judge you, harshly. My gross income was only five digits last year and I still gave a couple hundred dollars to charity. What made it more interesting is that the brother who was charitable was still married, while the other brother was going through a nasty divorce. Who says that a tax return can’t tell you anything about a person?

5. A large tax refund does not necessarily mean your accountant did a good job

This is the most important one to me and the one that aggravates me the most. While it might feel good to get a large refund, that really isn’t a great thing. It just means that you overpaid your taxes during the year. That refund that you get is money you have already paid; it’s not just free extra money coming to you. Your large refund is merely an interest-free loan that you gave to the government.

I had a tax professor in grad school who always stressed this point. He told us that the best position to be in on your tax return was to owe just a little bit (like $100 or so). That way, you knew that you hadn’t given any extra money to the government. I get frustrated when I see car commercials around tax time saying “bring in your tax refund and we’ll give you a car.” First off, the size of your tax refund says NOTHING about your ability to finance a car. Second, it’s ads like these that make people believe it’s good to get a large refund.

As an extension of that, owing money on your taxes isn’t necessarily a bad thing, either (and it also doesn’t necessarily mean your accountant did a bad job). If you owe money on your return, then one of three things has happened: (1) You made more money, which is great and means you’re still netting more money in the end even after taxes than you had last year. (2) You had fewer deductions, namely medical expenses, mortgage interest, and property taxes, which is great for you and means you actually saved money throughout the year. (3) You had less taxes withdrawn from your paychecks. The first two items are both good things. Making a larger income and/or paying fewer medical expenses means that overall financially your year was better than it had been in the past. The third item is good for you in a sense because it means that your paychecks were likely comparatively larger than in prior years. So the money that was hitting your bank account each month was larger than it had been the year before.

Basically, if you owe money on your tax return, then congratulations on doing better than you had the year before! Go you!

The most important thing that this past year has taught me is this: I don’t want to be in public accounting anymore. I’m not sure where I want to be exactly, but I’m sure as hell this isn’t it.