We’re just about to the time of year in the US when we start receiving various tax documents, perhaps the largest batch of official paper that we get on a regular basis. It can be hard to keep track of everything that comes in, and there is sometimes a bit of nervousness about making sure we get it all and that we deal with filing our taxes correctly. The anxiety is not entirely misplaced, given the financial consequences that can follow from not doing it, or doing it wrong. Besides, the IRS is well-known as a frustrating bureaucracy, and who enjoys dealing with those? Some of us have been lucky enough that someone else in our lives has taken care of the entire shebang, but whether we’re on our own because we’ve reached adulthood or we’ve recently separated, divorced, or been widowed, it may now be time for us to be responsible for this rite of adulthood. Fortunately, there are ways to make the entire process a little less overwhelming, and I’ve listed a few below.
Organize your documents. You can use a folder on your computer, or a plain paper folder – just pick one place everything will go. Ideally, stick them in there as they arrive, printing out electronic versions if you’re collecting hard copies or scanning paper when you get it. You can even use the OneDrive and DropBox apps to scan directly into a cloud storage folder using your cell phone camera. As you’re doing so, you might find it a good idea to make this a year-round habit, to collect various important documents when you get them whether they’re for taxes or not. For anybody who needs to track expenses for reimbursement, deductions, or just plain budgeting purposes, this includes jamming all of your receipts into a folder or an app like Expensify right away, not weeks later. It’s not necessary to get them in any particular kind of order right away. You can start scheduling a recurring time later, to do the organizing part of putting things into some sort of order or fixing filenames, perhaps at the beginning or end of each month. Doing little bits at a time is much more manageable than waiting until you have to dig through a month’s or year’s worth of junk email and regular mail for what you need, plus you won’t be as likely to miss or lose something entirely.
Set a date with yourself to complete and file the forms. Life gets busy and it’s easy to put off a dreaded task even when we do have free time, especially if those moments are too short to really dig into a complicated endeavor. Besides, doing taxes is work and should be treated as such, and not as an incursion into the time we find or have set aside for relaxation and self-care. Instead, schedule a generous amount of time to sit down and figure everything out, in one or several blocks, at least an hour or two more than you think you’ll need. It will be far less stress for you if you aren’t feeling rushed to understand and finish everything. If you finish early, then that extra time becomes a little reward for you too. Just make sure to set the date or dates well in advance of the actual deadline (and file an extension and pay estimated taxes in advance if you know you’ll not get yourself together in time). That way, if you run into any sort of roadblock or necessary delay, you have plenty of opportunity to address it instead of having that additional last-minute panic. Also, you’ll have the option to put your pen down at the end of your block and keep going at a later date, after taking a break to clear your head and come down from the anxiety of dealing with those numbers.
Consider hiring a professional. There is no shame in hiring an expert to be an expert – and if you’re struggling with that, you can join me in the shame circle because that’s what I did and it was one of the best decisions I’ve ever made (PM me for his contact info!). Tax codes are arcane and there are many details and subtleties. Even if your taxes are relatively simple, it can be worthwhile to pay somebody to remove a source of stress from your life, ensure it’s done right, and take responsibility if it’s done wrong. You might even end up saving some money in the long run, not to mention precious time. Hiring an expert does still mean doing your homework of gathering documents and possibly filling out questionnaires, but the process is generally more free-form and you have someone right there whose very job it is to work with you when you don’t understand the assignment. They’ll also be able to spot when you’re missing information and where you might be able to find it. At the very least, ponying up for the tax prep applications like TurboTax or TaxAct that will guide you through the process is money well spent over trying to figure out the bare forms yourself. At certain income levels, it won’t even cost you anything to use one of the applications or you might even be able to get free or cheap live help through certain taxpayer assistance programs.
Together, all of this can become a springboard for staying on top of your financial picture year-round. It’s not quite to doing budgets or learning how to invest and otherwise manage your money, but you’ll make a good start when you take small steps to track where you’re at and commit to regular effort to take care of the basics of dealing with your finances.