We are living in dramatically uncertain times. While our current situation is both devastating and distracting, it doesn’t cross the “file those taxes already!” line off our collective to-do list. So how are we supposed to manage this along with everything else?
Fortunately, the tax deadline has been pushed back to July 15, buying us all an extra few months to tackle our taxes once and for all. But if you’re still left scratching your head and wondering where to begin, take a look at the five tips below to help diffuse any remaining anxiety you have about your money situation right now.
1. Examine your anxieties to combat them. Major tax-time fears include owing money, being audited, and just plain making a big ol’ mess that will take years to untangle. The fact remains that you might owe some money in taxes, but you have several months to pay your bill. Fewer Americans than ever are being audited, and it’s largely avoidable. And you might make a mistake, but you can always file an amended return.
2. Realize that it might be above your paygrade (and that’s ok). There is an entire industry of professionals who specialize in tax preparation for a reason. Depending on the complexity of your situation, you may need to harness the skills of one of those professionals. Leverage their knowledge and don’t be afraid to admit that you, like millions of others, should hand your taxes over to a pro.
3. Change the way you think about taxes. If you’re an independent contractor or a small business owner, your tax filing is just an extension of your business process. Even for the more traditionally employed, filing taxes isn’t a punishment handed down to the masses. An on-time and properly-filed tax return could mean a bigger line of credit for your business, the ability to access unemployment benefits in an emergency, or the difference between your inclusion in industry events or sitting on the sidelines.
4. Create a process that works for you. With a hard and fast built-in deadline for tax filing, you can work backward and plan to take on one small task per day or week—whatever works for you. Create a braindump list of everything you need to do, make a plan of attack, block the time on your calendar and get it done in phases. Having just one goal for the day can make the most overwhelming job seem like a breeze.
5. Pay special attention to the hardest parts. That might sound a little counterintuitive but think about this: identifying the thing you hate the most is the first step in loving it. If you didn’t do a great job of collecting all your 1099s last year, make a point of doing better this year. If you didn’t bank any income and are faced with a big tax bill, set up a savings account and divert a portion of each paycheck this year. Next tax season you will be thankful.
If all else fails, file an extension. It’s just one form and it gives you six months to sharpen your pencils and get zen about the whole thing.
