Is Your Old Filing Status Stealing Your Tax Refund?

Ralph Estep Jr.
00:00:00

Picture this. You're staring at your refund check.

Wonder why it's so small, while your neighbor down the street, who's in almost the exact same situation as you, just got back enough to pay off their car. What if I told you that thousands of dollars in tax refunds are slipping through your fingers because of one simple checkbox on your tax return?

Today, I'm going to share the heartbreaking story of Michelle, a hardworking mother who lost out on $8,000 money that could have changed her family's life, all because no one told her about this critical tax filing secret. If you're a single parent, recently widowed or supporting family members, this episode could literally put thousands of dollars back in your pocket.

So stay with me as we answer the burning question. Is your old filing status stealing your tax refund?

Podcast Announcer
00:00:50

In a world where crushing debt keeps you trapped, where living paycheck to paycheck has become your new normal, and where the dream of retirement seems impossibly out of reach, there's hope. Join financial evangelist Ralph Estep Jr. A man who's walked through the fire of financial failure and emerged stronger on the other side.

Welcome to Ask Ralph, the show where real world experience meets biblical truth. To break the bondage of financial despair.

Get ready to take control of your money, break free from the financial stress and align your resources with God's purpose for your life. This is Ask Ralph with Ralph Estep Jr.

Ralph Estep Jr.
00:01:31

Welcome to the show. Today we're tackling a question that could literally change your tax refund and maybe put thousands back in your pocket.

And listen, I've helped countless individuals and small business owners, and what I have found is too many people have been missing out on what's rightfully theirs simply because they don't understand the the tax filing options. Today, I'm going to share a widow story.

And listen, I'm going to talk to you about some practical steps of how you can not leave money on the table this tax season. Because I see this, it's a widespread issue.

If you're a single parent, recently widowed or supporting family members, I'm going to tell you right now, this episode could be the financial breakthrough you've been praying for because I know exactly what to tell you. I've been reviewing tax returns for over 30 years and I've worked with countless hardworking individuals.

And so many people are missing out on tax benefits because they simply weren't aware of all of their tax filing options. So whether you're dealing with managing a household loan, supporting a family member, or sad to Say, losing a spouse.

The tax code has specific provisions designed to help you keep more of your hard earned money. And understanding your tax filing status helps you maximize every dollar you're entitled to receive.

And that's the goal of today's show because I want to get you every dollar you're entitled to receive. So think of tax filing status as one of those essential financial tools, just like your budget or investment strategy.

Well, if you missed yesterday's show, we had an enlightening conversation with Dr. Alex Watson from Admire Medical. We talked about the financial benefits of preventive care.

We learned how investing in your health today can save you thousands tomorrow. So I'm going to encourage you to go check it out.

You can check out all of our episodes at askralph.com well, let me share this truly heartbreaking message I received from Kiersten. Ralph, I'm at my wits end and hoping you can help.

Since losing my husband James three years ago, I've been struggling to keep our family afloat financially. Every month feels like a constant battle between paying bills and keeping food on the table for my 12 year old son Matthew.

I've been filing my taxes as single since James passed. But last week my friend mentioned something that kept me up all that night. She said I might be eligible for a different filing status.

That could mean thousands more in refunds.

Ralph, when I heard this, I broke down crying thinking about all the times Matthew had to skip basketball camp because we simply couldn't afford it or how to been putting all fix in our aging furnace. I feel like I've failed my family by not knowing this.

The thought that I might have missed out on money that could have made life easier for my son is eating me up inside. Please tell me, am I making a mistake with my taxes? Is there hope for someone like me to recover what I might have lost?

Well, Kiersten, thank you so much for your question. And listen, I can hear the weight of responsibility in your voice. And this is what I work with. I regularly work with families after loss.

And Kiersten, I am so sorry that you lost your husband and now you probably feel completely overwhelmed because you've got to shoulder all these financial decisions alone. And I know you mentioned those sleepless nights. You're worrying about your son.

You're worried about his opportunities that you're missing out on because you've got this hyper focus on your on the budget. And it's something I learned a long time ago. And this is a truth. Taxes aren't just about numbers.

They're so much bigger than that they're about providing the best possible life for our children, for our families. And your friend's comment about the filing status must have felt like both a blessing and a burden.

I'm sure at first you thought, hey, there's hope, there's potential hope. But then you probably started to feel that gnawing feeling that you might have missed something.

And let me just assure you, Kiersten, right now, this is the honest to God truth. You haven't failed your family. Because sometimes we all just need moments of quiet reflection to gain clarity in chaos. And I imagine over.

I've never been through the loss of a spouse, but I imagine over the last three years, it has been chaos. So you need some guidance to understand these complex financial matters. And let me just tell you something, Kiersten.

A lot of people say this to me, say, Ralph, I feel like if I reach out for help, it's a sign of weakness. But I say it on the show all the time. Seeking help is not a sign of weakness.

In fact, it's actually a sign of wisdom and it's a sign of good stewardship. And Kiersten, I can feel your dedication in providing for Matthew. Why you're still grieving and you're. And that shows incredible strength.

So, Kiersten, let me explore how today we can turn this situation around and potentially cover some of those missed opportunities, because I truly believe you might have missed some.

Now, listen, if you're just like Kiersten and you need answers, you have a question that you don't know where to find the answer, one thing I'm going to encourage you to do is start your search at askralph.com that's the website for our show. There's a little search icon there, and you can just type your question in there and you'll have access to over a close to 700 episodes.

Now, I've done blog posts, I've done short videos, I've done the podcast. So before you get into doing a Google search or something like that, go right to askralph.com and maybe you'll find an answer there.

Now, Kiersten, your situation reminds me of a truly powerful verse from the book of Proverbs, chapter 15:22. And I use this on the show all the time because it is so appropriate for your question. And this is what Proverbs 15:22 says.

It says, plans fail for lack of counsel, but with many advisors, they succeed.

So, Kiersten, let me be your advisor today and let me get right into my gratitude statement, because today I'm particularly grateful Kiersten, for the opportunity to help people like you uncover financial blessings they might be missing, just as God provides guidance through his word.

So let me start with an interaction I had just last year with a new client that completely almost dovetails to the exact same situation that you're in, Kiersten. Well, let me set the stage here.

And this was a situation last year that forever changed how I view tax situations because now I see that God's hand is in even the smallest of financial details. So last year I met a woman and let's call her Michelle. And Michelle, just like you, Kiersten, had just lost her husband.

In fact, hers was exactly three years before that. She came in and she was carrying, just like you, Kiersten, this grief.

And she had this financial worry because like you, she just had all of this financial burden placed on her. Now, in Michelle's case, she was working two jobs and she was barely keeping up with her bills. It was truly a struggle. And Michelle had a daughter.

I'll call her Charlotte. And Charlotte was one of these kids that really enjoyed dance.

And Michelle came to this point where she just couldn't afford to handle those dance classes. I don't know if you have children that do dance. I had two boys, so I didn't have that. But a lot of my clients have children that do dance classes.

And that stuff is not cheap. And I remember when Michelle came in to get her taxes done, she told me about that.

She told me about how that really just bothered her that she had to cancel those does dance classes for Charlotte.

And it reminded me how financial struggles, those things that we're all going through, and listen, we're all going to go through these times in our life, they affect our whole family. So let me tell you how I come to meet Michelle. Well, Michelle had found out about us because she had talked to somebody at work.

She had always been doing her own taxes because frankly, she didn't want to spend the money. Like I said, she was working two jobs. She was trying to figure out how to make ends meet.

And the idea of paying someone to do her taxes, it just didn't fit into her budget. So she'd been filing single well, then all of a sudden she reached out to me.

We sat down, I reviewed her situation, we prayed about it, and we uncovered something that brought us both to tears. When I, when I looked at her returns, I almost couldn't believe what I saw. And it annoyed me so much.

She had been using some online free filing software and it never mentioned the idea that she qualified for what's called a qualifying widower. And she had missed out on filing that.

And when I looked back at it over three years, that little oversight had cost her $8,000 in refunds because that filing status would have put her in a lower tax bracket. It would have given her a higher standard deduction.

And as we sat there and talked, I realized that my show is all about combining practical wisdom and faith. And Michelle's story shows how God often works through unexpected channels.

She came to meet me because of a discussion with her friend who said, hey, I know this guy Ralph. He posts things on Facebook all the time. He's almost annoying how much stuff he puts out.

But he's always talking about his Ask Ralph show, and he talks about his accounting firm. And that's what led Michelle to reach out and set up a meeting for me.

So like I said, we sat down, we went over her stuff, and I said, Michelle, I've got some good news and some bad news. The good news, the timing is perfect. We can go back and amend those tax returns, and we can fix what you've missed.

We got to be really quick about it because there's a three year statute for refunds. But we had just enough time to get it done.

And let me just tell you, across the desk, I started to see her eyes welling up with tears, and then it just was full on crying. But she broke down in my office because you don't understand, this for her was life changing money.

She's working two jobs trying to figure out how to pay for Charlotte to do the things that Charlotte was passionate about. That dance class, and I remember Michelle says, hey, hey, can I give you a hug? And I said, sure, sure. Hugs are fine. We can do that.

So the transformation was remarkable. It took us several months. We got the tax returns filed right away because it was simple, actually. We just had to go file amended returns.

So three months later, she had finally gotten her refunds, which actually I told her was kind of quick. And she called me, she said, Ralph, I just want to again thank you for all that you did to help me with this situation.

And she said, and this still gives me goosebumps to this day. She said, Ralph, I got to tell you, Charlotte's back in dance class, and she is absolutely loving it.

In fact, she's been picked, I don't know what they call it, the leader of the next production or something like that. And she said, Ralph, here's something else I've been able to do ever since my husband died.

I'd Never been able to do it, but I built an emergency fund and I used those tax refunds to do it. I used some of it, you know, for restoring the stuff at the house. I got the furnace fixed. I got Charlotte back in the dance classes.

But I was able to put that money into that emergency funds. And so again, what does this show us? See, it wasn't just about taxes.

When I sit down at my desk every day now, and I came to this realization a couple years ago when I really started thinking about what is your purpose, Ralph? And see, it's not just about taxes. What I do restores hope and it shows how God provides for us when we seek both spiritual and financial wisdom.

So, Kiersten, just like Michelle, let me just assure you right now you're not alone in this journey. Together, we can explore every option to help secure your family's future. So here's the things you absolutely need to do.

These are what I'm going to call my critical steps. These are the things you've got to do today.

You've got to review and amend your previous returns because I 100%, I don't know your whole situation, but based on what you said in your question, I truly believe you qualify for that qualifying widower on your past returns.

And listen, just like Michelle, that could provide significant tax refunds for the past several years and it will give you benefits moving forward because you might not qualify for the qualifying winner, but if you still have that child at home, and I'm guessing you do, you would qualify for head of household. So one of the things I want to encourage you to do is go and amend those returns right away and make sure you do it quickly because of that statute.

Because listen, Kiersten, this is going to help you immediately with Matthew's needs, with Matthew's activities. It's going to help you with those home repairs.

And I'm going to encourage you, go find a qualified tax professional who will ensure that he or she understands all the potential deductions and credits you're qualified for, identify those and get them done. You can certainly reach out to me. I do taxes and I'll talk a little bit about that later in the show for people all over the United States.

And once you do that, then you've got to start thinking about optimizing your tax strategy. That's what I talk about on the show all the time. It'll be about tax planning. Maybe you take a look at doing some tax advantage accounts like IRAs.

Again, I don't know your situation. I don't know what you're contributing to. But IRAs, HSAs, because those will help build that long term security.

Maybe you can look at some education related deductions or credits that could help Matthew as he moves forward because you said he was a young adult. He's going to be looking at college potentially soon. And you've got to be aware of what's out there.

And if you own a home, maybe there's some benefits in doing, you know, mortgage interest deduction or property tax. Again, I don't know your whole situation.

I would really encourage you to work with a broker as well and look at some tax investment strategies that could help you and help Matthew for his future. Maybe start looking at doing a 529 or a college savings plan.

You know, look at strategic ways to build that wealth or build that situation that you're in now. And here, Kiersten, if you don't hear anything else I say, and this is a beautiful thing, there's absolutely hope, there is hope.

You potentially could recover those missed opportunities through filing those amendment returns. So listen to me, please do this. Go and talk to a tax professional.

Like I said, you can reach out to me and set yourself up for a stronger financial future. So you and Kiersten and everybody else listen, here are my action steps.

If you find yourself in the same situation or you're wondering, hey Ralph, would I qualify for this? Number one thing you've got to do is schedule a professional tax review. Book a consultation with a qualified tax professional.

Like I said, you can go to askralph.com and book a call with me.

Gather all your tax returns, get the past three years of your tax returns if you're similar situation to Kiersten and go and show somebody those things. Because listen, if we're doing our job as accountants and effective professionals as a tax, we should be looking at those tax returns.

I do this all the time in my practice. A client will come in, maybe it's somebody I've never met before. They come and they sit with me.

I say, hey, let me take a look at your tax return from last year. If they have it, I'll look at a couple different years and many times I will find stuff that's wrong.

I'll find ways that they missed out on credits or deductions. So those things are out there. So do that first. Now schedule that appointment for that tax review. I'm not talking about just tax preparation.

That's great, but I'm talking about tax planning. Another thing, I'm going to encourage you to do. Because Kiersten, one of the things you mentioned is you're really struggling.

You're having a hard time making ends meet. Well, this is a great time to conduct a financial health assessment.

You know, as I talk about on the show all the time, create that detailed list of your monthly income and expenses.

Document all your assets, track your cash flow patterns and really understand why your money is tight and where you can get help to fix those problems. Because a lot of times you don't even realize that there's a big hole in the bottom of the boat.

And once you do this financial assessment, you will find those holes and then listen. Anybody listening to this, this is the key. You got to develop a forward looking strategy. Maybe that means working with a financial mentor.

Create a sustainable budget or what I call an intentional spending a plan. Like I said, look at those tax advantage investments. Create a plan that aligns with your financial decisions.

And more importantly, let's bring those two things of faith and values into it. Now, like I said, this is a must. You've got three years to file those tax returns, those amended tax returns to get that refund.

Because once you go past that three year statute of limitations, the, the IRS will not give you those refunds. So do that. Set up that emergency fund.

Maybe if you find this windfall, Kiersten, maybe this is a great opportunity for you to do like Michelle, did you get that windfall? And be prepared. It's going to take a little time. The IRS takes some time to process amended returns.

It's not like you're going to file them and then three weeks later, like your typical tax return, you're going to have that money in your account. It doesn't happen that way, unfortunately. So stay on top of it. But it's probably going to take 3, 6, 9. I've even seen it take a year.

And remember this, Kiersten, just like I said earlier, you haven't failed your family. Just reaching out to me and starting to become educated. You're taking important steps to improve your situation.

And just like many of my listeners, just like you, Kiersten, they're probably nodding their heads and they're saying, yeah, that's right. Because, Kiersten, you're learning to combine practical financial wisdom with faith based principles.

And the truth is working together, we can help you build a stronger financial foundation for you and for Matthew.

Now, I know I covered a lot today and one of the things I want to bring to everyone's attention is every day as I record this show, I also write a blog post. I get A little deeper in that. I give you some resources, I give you some charts and other things you can look at.

And you can find all of those by going to askralphpodcast.com/blog. Again, that's askralphpodcast.com/blog. Well, let me share something heartfelt with you, Kiersten. Your story touched me deep today.

It reminds me why I do what I do here at Saggio Management Group. That's my accounting firm. So let me speak directly to your heart for a moment.

You know that knot in your stomach when you're looking at those tax forms? You know that knot you felt when, when somebody said to you, hey, you might have missed something.

That overwhelming feeling, Kiersten, that you're experiencing? I see that every single day in my practice and it breaks my heart because it doesn't have to be this way. And that's why I'm so passionate about this.

I look back at the past year alone. I've helped countless widows. I've helped countless single parents and families recover thousands in missed refunds.

And that was money that could have made a real difference in their lives. Just like your situation, Kiersten, it wasn't their fault. They simply didn't know the tax code.

So let me tell you what makes our approach at Saggio Management different. And this is the honest to God, this is what the difference is. We combine financial expertise with Christian principles.

We marry those world just like I do here on this show. We're here year round, not just during tax season. At April 15, I don't roll up the mats and take off. I'm here year round.

And one of the things that I just started offering is year round tax services where you pay a monthly fee and you've got access to me all year long because the value is in tax planning. And because of virtual zoom and all that kind of stuff, we offer virtual services nationwide.

It makes it convenient for you, just like you're sitting in front of me. I just had a tax preparation yesterday. I pulled it up on my screen here.

We had a conversation, we did all the work and the person was sitting on the other side of the country. But here's the most important part. When you work with us, you're not just getting a tax preparer. That's simple.

You can go find those at the big tax preparer houses driving through your town. But you're getting a financial mentor who understands both your practical needs and your faith journey. And I think that's so important.

I have so many clients that say to me, Ralph, I come to you because I understand your character. I understand for you, it's not just about, hey, I can I say this on the show all the time. I can make you a very rich scoundrel.

But they know that I'm not going to put that in a position where they're going to have that faith question. They're not going to try to cheat the government. So here's my promise to you.

When we prepare your tax returns, we'll review your previous returns at no cost. That's what I do. I want to see if you've missed any opportunities.

So Kiersten or anybody else that's in your situation, you just want to ensure you're making the best financial decisions possible. I am here to help you, so I'm going to encourage you, take that first step towards financial peace of mind.

You can Visit me askralphpodcast.com/taxprep that'll take you right to our scheduling site for your tax preparation today. Remember, good stewardship isn't just about managing money. That's part of it, but it's about honoring God with our financial decisions.

So don't wait until next tax season. Now is the time to act. Don't spend another night wondering if you're leaving money on the table.

Let's work together to ensure you never pay more than your fair share while aligning your finances with your faith. Again, Visit askralphpodcast.com/taxprep and do it now. Because your financial peace of mind isn't just business to me. It's my calling.

Well, now let's get to today's reflection questions, and let's think about how what we've covered today impacts our life. So the first one is this. When was the last time you conducted a thorough review of your tax situation?

And what's stopping you from seeking professional guidance to ensure you're not leaving money on the table? That could be helping your family examine your situation, examine those potential missed opportunities. Maybe you're scared to spend the money.

Well, let me encourage you. Money can be spent. It's an investment. You may very well be missing out on something that could have dynamic importance in your life.

So that's the first thing. Conduct a thorough review. Number two, how might you approach.

How might your approach to managing finances change if you started viewing tax planning not just as a yearly obligation? You know, a lot of people think like that, oh, I got to get those taxes done. It's one of the things they dread.

I have people say to me all the time, it's like going to the dentist. But what if you started viewing it as part of your Christian responsibility to be a good steward of those resources God has entrusted to you?

Would that change the dynamic? Would that that change the whole paradigm of how you see taxes?

And number three, like Kiersten's story showed us to Michelle's story, a single oversight and tax filing can have impact on multiple areas of your life. Like we saw with Matthew, like we saw with with Charlotte.

It could affect our children's activities, it could affect our home maintenance, it could affect us having two jobs. So what areas of your life might improve it? If you took action today to optimize your tax situation. So that's what I encourage you to do.

Take action today. Reach out to someone, have them look over your tax returns.

Well, let's talk about tomorrow, because tomorrow we talking about a crucial topic for car owners and that's an insurance nightmare that could cost you thousands.

I want to talk to you tomorrow about this particular type of insurance that a lot of people don't get but in the end could really save you a ton of money. So you don't want to miss tomorrow's information that could protect your investment.

And remember, as I close today, my passion is to help you achieve financial success. I want to see you live out your dreams and I want to see you grow in your faith. That's what I want to do. That's my mission field.

And I know together, working together, we can master your finances from a Christian perspective. So as I always end the show, stay financially savvy out there and may God bless you.

Podcast Announcer
00:26:05

Thank you for joining us on the Ask Ralph show, and with a simple click to subscribe, we'll invite you back to our next episode. And remember, financial issues don't have to be complicated. Just Ask Ralph.

The information contained in this episode of Ask Ralph is based on data available as of the date of its release. Saggio Accounting Plus and Ask Ralph Media, Inc. Ask is under no obligation to update this content if changes occur.

Applying this information to your specific situation requires careful consideration of all facts and circumstances, and any information provided is not to be considered as financial, tax or legal advice. Please consult your tax advisor or attorney before acting on any material covered.