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Beat the Dread of Filling Out Tax Returns? Strategies to Conquer the Procrastination
Do you dread tax return season? You're not alone! Many people put off filing their taxes until the last minute. But why do we procrastinate, and how can we tackle this fear? To get a better understanding, we chatted with behavioral economist and author, Dr. Thomas Mathar.
Why Do Some People Delay Filing Taxes?
Dr. Mathar reveals that procrastination is a common behavior, and filing taxes is no exception. Despite the apparent benefits of early filing, such as possible refunds, we postpone this task due to several factors:
- Complexity: For many, the tax system is complicated and intimidating, and the fear of making mistakes is real.
- Lack of immediate reward: Tax filing requires effort in the present, with any rewards coming in the future.
- Lack of social pressure: Since no one knows if you've filed on time, there's little incentive to act early.
- No urgency: Without a sense of pressure, there's no motivation to act.
Overcoming the Fear of Tax Filing
Underlying emotions such as anxiety and embarrassment often drive the dread associated with tax filing. To conquer procrastination, try these methods:
- Careful Checking: Below are six common mistakes that can cost you money when filing taxes. Instead of thinking, "Taxes are such a pain but necessary," focus on the positive––"How great would it feel to have taxes out of the way?"
- Reframe the Mindset: Rather than viewing tax filing as a bureaucratic hassle, think of it as an annual financial check-up to gain control over your financial situation.
- Incentivize Yourself: Reward yourself for completing each section or link the task to a pleasurable activity, like enjoying a piece of cake.
- Divide and Conquer: Split the task into smaller, manageable parts. Don't try to tackle everything at once; start by collecting the necessary documents.
- Make a Plan: Set a deadline and invite a friend or partner to join for an hour of focused filing. Knowing others have already completed their taxes can help motivate you to take action.
For busy small business owners, consider using cloud-based accounting software and automated expense tracking to streamline tax prep. Keeping personal and business finances separate will also simplify the process.
Preparing ahead will go a long way towards eliminating stress. Gather your financial documents early and set specific milestones throughout the year. Remember to focus on the benefits––less stress and potential refunds––and consult with a tax professional or tax preparation services if necessary.
With better understanding and proactive strategies, you can conquer the emotional hurdles and approach tax filing with confidence and ease.
Sources:
- ntv.de, Christoph Jaensch, dpa
- [1] https://www.sciencedirect.com/science/article/pii/S1054840514000263
- [2] https://www.forbes.com/sites/jessicamurphy/2021/02/15/4-tax-tips-for-small-business-owners/?sh=6fce6a3910a2
- [3] https://www.fool.com/the-ascent/smart-money/accounting-software/best-business-accounting-software/
- The complexity and intimidation of the tax system can lead individuals to procrastinate in filing their taxes, but focusing on the positive aspects, such as relief after completion, can help combat this behavior.
- Vocational training programs, particularly in the field of finance, could assist taxpayers in understanding the tax system better, reducing the fear of mistakes and procrastination.
- Submitting tax returns early can provide taxpayers with a sense of accomplishment and lessen the stress associated with the task, as well as potentially securing refunds earlier.
- For small business owners, vocational training in business and personal finance, along with using cloud-based accounting software and automated expense tracking, can streamline the tax preparation process and minimize the stress of tax filing.
