A Rare Financial Opportunity with Tax Reform


For about 30 years, tax season was my jam.

I did tax returns for my clients, my family, and myself, but this April was different—I didn’t have any returns to do on tax day! It was amazing, and on my Facebook Live, I held a moment of silence for those brothers at arms who were still fighting the good fight, frantically trying to beat deadlines. (You can watch the video here.)

Though doing tax returns is no longer my business, I still do a handful of them, and a few weeks ago, I made a discovery.

I was doing a tax return for a friend, and I realized this person was going to save about $3000 on their taxes next year (presuming their numbers stayed the same). I reached this conclusion by running their numbers through my tax return program, which applied the new rules from the tax reform act.

Obviously, this is a crude method and I don’t expect the changes to manifest in exactly $3000, but I could see that you and I will likely experience a little relief in the burden of our federal income tax next year.

We are about to find ourselves with a unique opportunity, and if we take advantage of it, we will be able to ramp up the peace in our lives.

Capture the Coming Savings

Next year at this time, you will likely find you’re getting a refund. If you plan ahead, you can capture this extra money and not allow it to sift through your fingers like sand.

What you choose to do with this money is up to you. You could make a significant decrease in your debt load. You could put it toward a needed purchase. Or if you wanted, you could lower your withholding (the amount taken out every payday), which would allow you to experience a little of that “refund” every month.

But whatever you do, have a plan and don’t let this money simply drift away from you. 

Build a Money Bumper

The average American will earn between 1 and 3 million dollars in their working life. That is true no matter their race, what they believe, who they are, where they were born, how they’re educated, etc. Yet that same person is walking around with virtually no “bumper” to absorb unexpected life events that demand their money. They are vulnerable to the “messiness” life brings: things like car accidents, hospital visits, unexpected house repairs.

But you don’t have to be unprepared. You can engineer your thinking and build yourself a bumper to accommodate some of this “jolt,” so when the messiness runs into you, you don’t end up back in a debt cycle.

The easiest way to build this protective bumper is by having an emergency fund. Instead of making the banker your bumper, you become the bank. Then the next time something unexpected comes and bumps you, it won’t cripple you and force you into debt. An emergency fund allows you to put away your credit card.

This principle expands into working capital in corporations, organizations, businesses—even retirement. What will our lives look like in the future when we come to a point where we earn less than we spend? We can build an emergency fund that will keep us from going back into debt.  

An Emergency Fund Means Greater Financial Peace

Because of the tax reform act, many of us will have a chance to get our heads above water. We can use this rare opportunity to start, or cushion, an emergency fund.

If we aim at something, we are more likely to hit it—but if we aim at nothing, we are sure to hit it. Let’s aim at stewardship, remembering that one of the benefits of good stewardship is peace.

God bless your Prosperous Soul.

Lauren Stinton