Conquering the Dread of Tax Season? Help's on the Way!
Navigating the Matter: Strategies Involved
Ever found yourself putting off a task until the last minute? Well, you're not alone. Many folks save the dreaded tax return till the eleventh hour. So, why is that? We chatted with Thomas Mathar, a behavioral economist, to find out.
Why's Filing a Tax Return So Late? Here Are the Reasons:
Thomas Mathar: Usually, procrastination rears its head when it comes to unpleasant or complex tasks. It might seem irrational, but from a behavioral science perspective, there's more to it than meets the eye.
- Complexity: Many find the tax system bewildering, fearing mistakes.
- No Immediate Reward: Effort for the tax return is now, while any refund - if there is one - is in the future.
- Lack of Social Pressure: There's no one watching whether you file early or late.
- No Urgent Need: No immediate pressure means no reason to act.
Where's the Fear of Filing a Tax Return Rooted?, and How Can It Be Overcome?
The fear is primarily emotional, rooted in past experiences or misconceptions. Changing perspective could be the secret. Instead of viewing the tax return as a pain, consider it an annual financial check-up. A chance to gain control over your financial health.
Tackling the Administrative Hassle - Tips to Get it Done:
- Embrace Frameworks: Reward systems can work wonders. Promise yourself a treat, or enjoy a piece of cake after every accomplished section.
- Take Small Steps: Tackle the task bit by bit. Collect your receipts first, then take your time with the return.
- Endure Together: Organize a session with a buddy or partner. Make a date to tackle the return together.
- Find Motivation in Numbers: Learn that many others have already submitted their returns; joining the majority can be satisfying.
Better Tax Season Ahead? What Changes in 2025:
Avoiding penalties and enjoying rewards are better ways to tackle late filings. Simplifying the tax return process, keeping it less deterrent, and making it more rewarding are the keys.
About the Interviewee: Thomas Mathar is the lead of the Center for Behavioral Research at Aegon UK, a company that offers investment and financial services. Here, he studies the factors influencing financial decision-making in the long run.
Insights:
To make tax returns less daunting and more appealing, consider the following:
- Nudges and Reminders: Send regular automated reminders and show social norms to encourage timely filing.
- Behavioral Training and Education: Offer workshops, online seminars, and educational content to teach the benefits of early filing and various strategies.
- Incentives and Feedback: Offer incentives for early filers and provide real-time feedback to keep taxpayers motivated.
- Behavioral Biases Mitigation: Help taxpayers manage anchoring biases, procrastination, and other cognitive biases.
- Social Influence and Community Engagement: Emphasize civic duty and encourage peer reviews to build a sense of community.
- Technology Integration: Leverage technology for automation, real-time analytics, and peer-to-peer communication.
By employing these strategies, taxpayers are more likely to approach tax season with confidence, leading to earlier filings and a smoother financial journey.
- The complexity of the tax system can be a major contributor to procrastination and late filing, with many people fearing mistakes in their returns.
- A lack of immediate reward and social pressure can also influence one's decision to put off filing taxes, as the effort spent now will only result in a potential refund in the future and there is no one monitoring the timeliness of the return.
- Thomas Mathar, a behavioral economist, suggests that changing one's perspective of the tax return can help overcome the fear and procrastination associated with it, framing it as an annual financial check-up and an opportunity to gain control over personal finances.
- In the future, simplifying the tax return process and offering incentives for early filers may help combat late filings and reduce the dread associated with tax season, according to Mathar.
