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Archive for the 'Taxes' Category

Better Not Cheat on Your Taxes For Karma Sake

Wednesday, January 10th, 2007

As we head into tax session, many people are going to be given a test on how much of their income they report. For many, this is an easy decision because their employer issues them a W-2 which makes it difficult to cheat. For others, who are self-employed or receive tips, it makes easier to hide some of their income and thus have a harder test to be honest. Word of warning if you are thinking about cheating on your taxes, do not do it! Even if there is not a chance of being caught, there are other reasons why you should avoid cheating on your taxes.

We all know the primary reason about committing a crime. Even if there is little chance of being caught, you may end up spending energy looking over your shoulder hoping that you never get audited and caught. I remember hearing a story when I was young about my dad’s boss who had a radar detector. He was speeding and relied on the detector to keep him out of trouble. Yet, at each corner of the road while driving with my dad, he kept on straining his neck to see if a cop was hiding ready to catch him. Needless to say, he was very stressed during the whole drive. Cheating on your taxes (even with a minimal chance of being caught) can create stress that robs you of energy for making even more money. However, if this was the only reason not to cheat, this would be a short article and it has not deterred many from underreporting their earnings which has resulted in of the $290 billion tax gap (difference in what the government should have collected and actually did collect).

Another main reason why to play it straight is karma. If you do not know what karma is, you can watch the show, My Name is Earl. Karma for me is about the cycle of energy. When we send energy out (and thoughts for that matter) to the Universe, it ultimately comes back to us. By cheating on your taxes, this is telling the universe that it is o.k. for others to cheat you. By taking the easy way out, you are giving others permission to take the easy way out at your expense. In talking to someone who was thinking about not reporting $600 of income for job, I talked to her about karma. Someone who heard me related a story about how a coworker came to her that day trying to take the easy way out and get her to do his work for him. Later that same day, someone stole his briefcase with his wallet in it (taking the easy way to money). I am not saying that the two incidents are related. However, there are coincidences that happen all the time and the first word is co-(incidences) meaning the person did something to create the situation in his life.

Everyone does it, don’t they? That is the problem. Many see cheating as no big deal while getting infuriated that people are cheating them. I even remember a tax preparer telling an undercover reporter that tips earned do not need to be included in his income for tax purposes. I guess that is one way to ensure the tax preparer provided the undercover reporter the largest refund. Some try to justify it as not fair that they have so little and pay so much in taxes when it would be easier to tax the rich. Trying to justify cheating is still cheating and makes it o.k. for others to do it as well. So, is it o.k. for a company cheats their employees if it means they can have larger profits? Some of those who say “no” are also the ones cheating on their taxes. They may complain that they are being “nickled and dimed” thus need to save money any way they can. However, by cheating others, they are only cheating themselves and invite others to nickel and dime them.

This even goes beyond karma. It is about your beliefs about your life. For example, if you feel the need to cheat to get ahead, then you may also believe that:

1. I can not get ahead with my abilities (if you could get ahead then you wouldn’t need to cheat)

2. I will always have lack (if you had enough or if prosperity was on its way to, then why would you need to cheat)

3. Someone else will cheat me (e.g., government with high taxes), so I need to cheat them first

4. Money is more important than who I am (you wouldn’t trade your values if you really valued yourself)

5. Money can hurt me (how can a piece of paper hurt someone though?)

Note, most of these beliefs come from feeling powerless in ones abilities to control money in their life. So if it is for you, it may be time to take power back by doing a financial plan with the first step being a budget.

For more, see How To Regain Power in Your Financial Life