Generally speaking, filing taxes is not at the top of the list of “fun things to do today.” Taxes are frustrating, confusing, and sometimes moderately depressing. Therefore, we tend to procrastinate when it comes to filing them. According to TurboTax, there are five general reasons we procrastinate when it comes to filing our taxes:
Laziness:We just don’t want to do it!
Thrill-Seeking:We think we work better under pressure (generally we don’t).
Lack of Urgency:There’s no penalty for dropping them off at the post office at 11:59 PM on April 15. Why hurry?
Availability of Extensions: Extensions don’t mean you have more time to PAY, just more time to file. If you are expecting money back, why extend?
No Expected Refund:If you aren’t getting money back, why give Uncle Sam our money a minute earlier than we have to?
Hopefully you’ve already filed your taxes, received your refund, and none of what I’m presenting applies to you. If so, way to go! (Now skip to #3, Create A Reusable File System To Track and Maintain Tax Documents). If you are still waiting to file your taxes, here are your next few steps:
1. Call For A Tax Appointment: Stop reading right now and call for an appointment with your tax preparer. If you don’t have one, now is a good time to do some research. There are, of course, a plethora of tax preparation options if you do an internet search on “tax preparation services,” but now may be a great time to use that social network you’ve been building. Ask your friends and relatives if they have anyone they could recommend. In addition, there may be some free tax preparation services available depending on your age and income, search “free tax preparation services.”
2. Gather Your Documents: By now you should have received all the documents required to prepare your taxes. These documents may include, but are not limited to:
- W-2s from your employers,
- 1099-MISC forms for self-employment income,
- 1099-INT (interest) and 1099-DIV (dividends) forms,
- 1099-B forms showing brokerage trades in stocks and bonds,
- K-1 forms for income from a partnership, small business, or trust,
- 1099-SSA form showing Social Security received,
- Documentation of charitable donations.
Other great sources for documents you may need to prepare your taxes:
Tax Preparation Documents for Homeowners
Documents To Take To Your Accountant
3. Create A Reusable File System To Track And Maintain Tax Documents: Once you’ve gathered all your documents, create a filing system (it may only be two file folders or envelopes) that will allow you to repeat this process year-after-year. Create two files/envelopes: Current Year Taxes and Previous Year Taxes. That way you will have one to use for the immediate filing and one to start saving documentation for next years filing. Create a checklist of all the documents that are in the Current Year Taxes file/envelope (generally it will be the same for next year, but adjust as necessary) and place it on/in the front of the file/envelope. I suggest using sturdy, plastic folders or envelopes for this purpose, that way you’re not replacing them every year. Plastic File Folders or Plastic Envelopes
Although filing taxes isn’t always fun and rewarding, the consequences of not filing can be expensive and stressful. Don’t procrastinate. Filing your taxes accurately and on time can save you money and unnecessary stress.