Mistakes, and taxes, are painful

It was the mistakes with money that generated some of the best (if painful) lessons.

For example, how to get a mortgage company to stop forcing you to have flood insurance when you don’t need it. Why housing appraisals are given so much weight if valuations for insurance, taxes and mortgage purposes range so widely — and the appraisers themselves are loosely trained. How to find long-lost property like insurance policies. Why home alarm systems are worth the cost. And how to run a background check on household help and train the workers not to share family secrets.

While the way the wealthy act often offers clues that we can use for our financial well-being, taxes are a different matter. How billionaires pay taxes has little to do with how the majority of readers pay each year. But the protestations of Warren Buffett aside — he noted he had a lower effective tax rate than his secretary — tax rates and policy are enshrined in the Internal Revenue Code, which taxes certain assets and income differently.

About a fifth of my columns mentioned taxes in some way. One thing I tried to impart was just how complex the tax system is. It’s crucial to have an adviser on even simple matters — like using a donor-advised fund to make the charitable gifts as a way to reduce taxes and still be philanthropic.

And that’s before anyone talks about trusts, which are often great vehicles for estate planning but can cause unintended issues for families if not thought through properly.

I had quite a run writing about estate taxes until President Trump’s tax overhaul increased the exemption per couple to over $22 million. At that point, few people had to worry about estate taxes anymore.

Taxes and trusts can be mind-bogglingly complex. I wrote a column on the alphabet soup of tax acronyms — and messed one up. That was one correction that proved a broader point: Tax jargon is intimidating and hard for anyone to get right.