“Clutter is postponed decisions.” Barbara Hemphill
The month of March is National Clean Up Your IRS Act month. My first thought was “Wow, doesn’t the IRS have enough influence in our lives without having an entire month dedicated to us “cleaning up our act” in support of them?” Actually, according to the event’s sponsor, the American Society of Tax Problem Solvers (www.astps.org), this month is designated to focus on resolving problems with the IRS before we file our current year’s taxes. I’m certain Barbara Hemphill would agree that if we’re thinking about times to NOT postpone decisions, filing our taxes would be at the top of the list.
Why do we procrastinate preparing our taxes?
- We don’t know how to start or what to do once we get started, so we just don’t start at all.
- We think tax preparation is going to be difficult and complicated, so we push the unpleasant task off in favor of something easier or more rewarding.
- We tell ourselves that we perform better under pressure, so we wait until the very last minute.
- We can’t find the documents we need to prepare them properly.
In most cases, and especially when it comes to filing taxes, procrastinating doesn’t solve the problem, it just postpones the stress.
So what can we do to better prepare for tax season?
- If you are enlisting a tax preparation agent, ask them for their suggested record retention schedule. If you are filing the taxes yourself, search on-line for a record retention schedule that fits your needs. This record retention schedule from SMEAD offers some guidance: http://www.smead.com/hot-topics/records-retention-guidelines-1394.aspSet up a simple, usable filing sytem.
- Make a checklist of all the items you, or your accountant, will need to file your taxes: W-2s, 1099s, bank/investment statements, work-related expenses, mortgage expenses, charitable donations, etc. Gather documents and have them convenient when tax preparation time is at hand. Update this list on annually to make filing that much easier.
- Identify any major events in the previous year that will need special attention: bought/sold property, job-search expenses, new family additions, etc.
- If you don’t already have one, set up a filing system that makes it easy to keep track of these documents throughout the year, thus reducing the panic and scramble some tax time.
Although filing taxes isn’t always fun and rewarding, the consequences of not filing can be expensive and stressful. Don’t postpone your decision on filing your taxes. Figure out what time and tools you need to finish your taxes and get the return done on time, potentially saving money, and certainly saving you some unnecessary stress.