Rich Habits Podcast — Episode 163: Why Tax Season Shouldn't Intimidate You

Hosts: Austin Hankwitz & Robert Croak
Date: March 30, 2026

Episode Overview

In this highly practical episode, Austin and Robert tackle one of the most stressful aspects of personal finance: tax season. Their mission? To remove the fear and anxiety many people feel about filing taxes by breaking down what really happens, sharing actionable tips, highlighting key tax credits, and offering a step-by-step “playbook” to turn tax time from a source of dread into a manageable (even routine) process. As always, they blend their own experiences with rich, real-world advice in a relatable, encouraging tone.

Key Discussion Points & Insights

1. Why Tax Season Feels So Stressful

Timestamps: [05:12] – [08:05]

• Anxiety Drivers:
  • Fear of mistakes leading to audits or penalties.
    • Robert: “The IRS audited less than a half percent of individual returns in recent years…if you’re a W2 employee and you have straightforward income, your actual audit risk is extremely low.” [06:16]
  • Complexity of tax forms and tax code jargon.
    • Austin: “Half of Americans report that they have little to no understanding on how to actually file their taxes… The average person with a W2, maybe some investment income, and taking the standard deduction shouldn’t be so intimidated.” [06:39]
  • Uncertainty: Am I getting a refund or do I owe?
    • Robert: “A refund is not a bonus. It means the government held your money interest-free all year and is finally giving it back.” [07:44]
    • “A tax bill doesn’t mean you did something wrong.”

2. Demystifying the Tax Filing Process

Timestamps: [08:05] – [10:57]

• What You’re Really Doing:
  • You’re simply reporting income, applying deductions/credits, and reconciling what you’ve already paid.
  • Austin: “The IRS already has a rough picture of your financial year before you even file. You’re just confirming information that already exists.” [08:36]
• Most People Overcomplicate:
  • If you’re organized and filing is straightforward, it’s far less daunting than it appears.
  • Robert: “Most people find that once they actually start, it takes far less time than they feared. If you remain organized throughout the year…tax season is a lot less stressful.” [10:37]

3. Documents That Make Things Easy

Timestamps: [10:57] – [12:08]

• Three Key Documents:
  1. W2 – Income and withholding details.
  2. Most recent pay stub – Shows retirement and healthcare contributions.
  3. Last year's tax return – "It tells you all the different accounts and forms you reported last year," helping you remember which statements to gather for this year.
  • Austin: “Those three documents answer 90% of your questions before you even start.” [10:59]

4. For the Self-Employed & Complex Returns

Timestamps: [12:08] – [12:43]

• File an Extension if Needed:
  • Not illegal, not failure—sometimes necessary.
  • Robert: “It’s not illegal, it’s not frowned upon… it’s actually encouraged.” [12:08]
  • Austin: “An extension is different from procrastination. It just means I’m going to file a couple months after April.” [12:38]
  • Avoid penalties by filing, even if you can’t pay in full.

5. Tax Credits & Deductions (Don’t Leave Money on the Table!)

Timestamps: [12:43] – [15:57]

• Standard Deduction:
  • $15,750 (single); $31,500 (married filing jointly).
  • Itemize only if your itemized deductions exceed these.
• Top Tax Credits Discussed:
  • Earned Income Tax Credit: Up to $8,046 for married, three children, AGI under $68,675.
    • Robert: “If your AGI is below that 68,675 and you have three children, you’re likely eligible for an $8,046 credit.” [14:41]
  • Child Tax Credit: Up to $2,200 per child under 17 for AGI <$400k.
  • Saver’s Credit: Up to $2,000 if married filing jointly, AGI < $79,000.
  • Austin on credits: “Go look up all this stuff, go do your own research… we’re just here trying to find the gems and share them with you all.” [15:57]

6. The Organizational “Playbook” for Stress-Free Filing

Timestamps: [16:37] – [20:17]

• Start a Tax Folder Every January:
  • Robert: “Start a folder… every time a tax document arrives, it goes into the folder. I have one of these, so does Austin.” [16:41]
  • Go digital: scan and save to Google Drive or Dropbox.
  • Austin: “I scan every single piece of paper, email it to myself, and upload it to Google Drive for every tax year.” [17:43]
• Decide How You’ll File:
  • DIY software (TurboTax, H&R Block) – budget option.
  • CPA for complexity.
  • IRS Free File: For AGI <$79k—“Super simple. It’s genuinely free. And it’s underused.” [19:34]
  • Robert: "The worst approach here is making the decision under deadline pressure in April." [20:17]
• Life Changes? Consult a Pro:
  • New marriage, child, freelance, inheritance = worth investing time with a tax pro.

7. If You Can’t Pay… File Anyway!

Timestamps: [21:35] – [24:01]

• IRS Payment Plans Exist:
  • Austin: “It is far better to owe the IRS money and be on this payment plan than not file your taxes at all… The IRS would much rather work with you… than chase you down.” [21:35]
  • Robert: Shared a real story about a friend who hadn't filed for two years—emphasized the importance of filing for avoiding jail and penalties.

8. The Wealth-Building Hidden in Right Tax Moves

Timestamps: [24:29] – [25:21]

• Austin: “Every dollar you recover through credits, every penalty you avoid by filing on time, and every deduction—will be saved and will compound for you... over a decade.” [24:29]
• Robert: “Building wealth isn’t just about making more money. It’s about keeping more of the money you already made.” [24:58]

9. Leveraging AI for Tax Optimization

Timestamp: [25:21] – [26:59]

• Austin shares: Used Opus 4.6 AI (Claude) to explore tax strategies—then cross-checked with his CPA.
  • “If you don’t or can’t afford a CPA...artificial intelligence is here... But take the AI info and verify with your CPA.” [25:21]

Notable Quotes & Memorable Moments

• Robert: “Your tax filing is more reconciliation than building from scratch. The information is largely already there.” [09:56]
• Austin: “Welcome to adulthood... Go get yourself a folder from Office Max or Staples. That’s what I did.” [17:43]
• Austin on tax extensions: “An extension is different from procrastination. It doesn’t mean failure to file.” [12:38]
• Robert: “A refund is not a bonus... It means the government held your money interest-free all year.” [07:44]
• Austin (on AI & tax tools): “Congratulations. Artificial intelligence is here... Go talk to Claude, Chat GPT, Gemini... then verify with your CPA.” [25:21]

Listener Q&A Highlights

1. Rich: Should I Pay Off My Rental Mortgage or Invest?

Timestamps: [28:41] – [33:13]

• Situation: $107k W2 + $93k spouse, two rentals, $103k mortgage at 4% cashflowing $600/mo.
• Robert: “I’d rather see that $103,000 get to work in the market...you’ll likely have better arbitrage over time...”
• Austin: “Perfect opportunity for a NEOS funds portfolio—generate monthly tax-efficient passive income.”
• Lesson: When rates are low and property cashflows, investing the lump sum may give better long-term returns and passive income than paying down the mortgage.

2. EB: Self-Employed, Using Old 401(k) & Selling Property To Qualify for Mortgage

Timestamps: [33:13] – [38:28]

• Challenges:
  • Tax impact of 401(k) withdrawal.
  • Mortgage qualification as self-employed.
  • Consider 1031 exchange, DSCR loan, or bank statement loan for more favorable lending terms.

3. Anna: If the World Changes, Should I Even Save for Retirement?

Timestamps: [40:08] – [47:16]

• Anna’s concern: With AI and societal uncertainty, does saving for retirement still make sense, or should I chase a dream (ex: buy a farm in Italy)?
• Austin: “I am just as scared as you are… but why not both? Contribute up to the match in your 401k, max out your Roth, and save for the farm, too.”
• Robert: “Personal finance is personal. Figure out what works for you. We can’t predict the future, we can only help you prepare for it.”

Actionable Takeaways — The Tax Season Playbook

1. Start a New Tax Folder Every January: Paper and digital—save all tax docs there.
2. Gather These Before Filing: W2, most recent pay stub, last year’s return.
3. For Extensions: File if you need extra time. Filing—even without full payment—prevents bigger penalties.
4. Know Your Credits & Deductions:
   • Standard deduction or itemize, whichever is higher.
   • Don’t miss EITC, child tax credit, or savers credit if eligible.
5. Use Software, IRS Free File, or CPAs Wisely: Consider complexity and costs. Know what fits your situation.
6. If Life Circumstances Change, Get Pro Help: One consult can save thousands if you got married, started a business, had a baby, etc.
7. If You Owe & Can’t Pay: File anyway and opt in to the IRS payment plan.
8. Leverage AI as a Tool for Strategy: Use tools like Claude or ChatGPT for suggestions—always confirm with a CPA.
9. Every Dollar Saved/Recovered/Penalty Avoided Compounds Over Decades: Don’t leave money on the table.
10. Stay Organized Year-Round So April Isn’t Stressful.

Tone & Style

Upbeat, down-to-earth, and approachable — never patronizing. Austin and Robert blend their own vulnerability and experiences — “Hey, we file extensions too” — with clear, direct, and actionable advice. They encourage listeners to “take a deep breath,” stay organized, and realize that fear is often overblown for most filers.

Final Words — “It’s Not What You Make, It’s What You Keep”

Robert: “Building wealth isn’t just about making more money. It’s about keeping more of the money you already made. And understanding taxes is one of the most direct paths to doing that.” [24:58]

Austin: “Every dollar you recover through credits, every penalty you avoid by filing on time, and every deduction…will compound for you in your favor over a decade.” [24:29]

This episode arms listeners with essential understanding and confidence to handle tax season every year — with less anxiety, less chaos, and more money left in their pockets.

Recommended for anyone wanting to take back control of their financial future—one tax return at a time.