This guest post is Part 1 in a 3-part series discussing taxes written by Christopher Remus, author of Tax Pain Relief.
The Primary Cause of Tax Season Pain
According to the the American Psychological Association’s 2014 Stress in America survey, “Paying with Our Health”, money is the most significant source of stress in our lives. So much that money has “consistently topped Americans’ list of stressors since the first Stress in America survey in 2007.”
The hard-and-fast tax season deadlines associated with tax filing dates make it nearly impossible to avoid coming face-to-face with this major source of stress in our lives.
The same study states that “nearly three-quarters (72 percent) of adults report feeling stressed about money at least some of the time and nearly one-quarter say that they experience extreme stress about money.”
Additional Causes of Tax Season Pain
Tax season also brings other sources of stress and fear to the forefront, including:
- Work stress, since work is the primary source of income for most of us.
- Relationship stress in form of marital contention, as money is one of the most common sources of disagreement between couples.
- Fear of making errors that may result in overpaying and/or additional fines and penalties.
- Fear of deadlines: Not filing on-time can result in additional tax-related problems down-the-road.
Taking these factors into account, it’s not surprising to learn that at least 30% of us procrastinate when it comes to doing our taxes. My guess is that the actual percentage of us who procrastinate, among readers of this blog, is much higher, since a large proportion of that 30% (and I certainly count myself in that number!) are small business owners.
Common Responses to Tax Season Pain
Bankrate lists some common reasons we procrastinate when it comes to doing our taxes, including:
- Feeling safer doing nothing and that we can avoid mistakes if we don’t do anything to make them in the first place.
- Being perfectionists and never thinking we’ll be able to do our taxes well-enough to meet the high demands we have of ourselves and that the government has of us.
- Believing we work better under pressure, or at least think we do.
As much as I’d like to laugh off these reasons and say that there’s no way I’d ever let them affect me, looking honestly at myself tells me that history begs to differ. What makes procrastinating even easier, is that there’s never a shortage of activities that we would rather be doing than preparing to file our taxes.
So what does all of this procrastination get us in the end? Does it give us some relief from the pain of tax time, or from the pain that manifests in the form of stress, tension and anxiety?
The Result of Procrastination: More Pain!
It’s been my experience that putting-off tax preparation only increases the pain I would feel at tax time – the exact opposite of what I was hoping to prevent. I finally got fed up with my inability to break this cycle when I found myself spending New Year’s Eve hunched over my iPad, talking to my accountant via Skype.
What made things worse was that I was talking to him from a hotel on a beach in Thailand, where my wife and I were supposed to be enjoying our first vacation in a very long time. I had delayed my year end tax preparation so far that year that I left myself with no choice other than to ruin a day of vacation.
Instead of enjoying my vacation with my wife, I had to deal with last-minute tax planning decisions that I felt ill-prepared to make, over a spotty Wi-Fi connection. Oh yeah, and then I did it again the next year, this time from a relative’s house in Puerto Rico.
The Good News: It’s Possible to Break the Tax Pain Cycle
So here’s where we get to the good news. There is an easier and better way to avoid tax pain while also preventing it from getting even worse by procrastinating. We can even avoid this pain in a way that conquers our strongest subconscious tendencies to procrastinate.
We can achieve this by putting in place a simple system that makes it easy to collect the information you need file your taxes. What are the keys to this simple system?
- It’s extremely simple to set-up
- It’s just as easy to use.
Once it’s been set-up, the system will just sit there, like a big virtual shoebox with a slot in the top where you can toss your tax information throughout the year and not have to look at it again until the tax deadlines start approaching. Some of the information collection tasks can even be automated, so you don’t have to touch them at all. If you’re going to procrastinate, at least you’ll be better prepared when you do finally do sit down to do your taxes or get the information to your accountant.
Why Use This System?
After implementing this system to prepare myself for last April’s filing deadline, I was able to get all the required tax information to my accountant in less than 30 minutes, on my way out-the-door to catch a flight to the Dominican Republic. If taxes have caused you pain for the last few years, check back for Part 2 of this series for details on this system designed to help you reduce the pain of tax season this year and for years to come.
About the Author:
Chris understands the stress and pain that comes with collecting various tax forms, bank statements, and receipts. To combat this issue, he developed Tax Pain Relief to make the tax information collection process a lot easier and better for himself. It works so well that he has since decided to share the process with others to help them get their tax lives organized, once and for all!
Tax time stress is way too common– I don’t know too many people who aren’t hounded with stress around this time of the year. Good rundown of some reasons why.