Conquering the Dread of Tax Season? Here's Your Secret Weapon
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Ever find yourself putting off that tax return like it's a dreaded chore? Well, you're not alone! But fear not, we've got some expert advice to help you tackle tax dread head-on. You might just surprise yourself and get the job done earlier this year!
We chatted with behavioral economist and author, Thomas Mathar, to understand why people tend to put off their tax returns until the last minute.
Why do people often delay filing their tax returns?
Thomas Mathar: It's simple; we all tend to procrastinate when faced with unpleasant or complex tasks. Although it might seem economically rational to file your tax return early and potentially get a refund, there are some behavioral factors at play.
So what are these behavioral factors?
First, the tax system can be confusing for many people, which deters them. Second, there’s no immediate reward for filing your tax return; any refund you might get is in the future. Third, there's no social pressure to file early – no one knows if you've filed or not. And fourth, there's no incentive to act unless there's immediate pressure, like a deadline.
Where does the fear of filing tax returns come from, and how can it be overcome?
The fear is often emotionally driven and fueled by past experiences or misconceptions. A fresh perspective can be helpful. Instead of thinking "filing taxes is horrible but necessary," try to look at it as an opportunity to gain better control over your finances.
How can people actually get the dreaded bureaucracy out of the way earlier in the year?
To kickstart your tax prep, consider applying different motivational methods – like linking the creation of the tax return to a pleasant activity, such as eating your favorite dessert. You can also reward yourself after each completed section.
You could also try breaking the task into smaller, manageable chunks. For instance, instead of doing the entire tax return at once, focus on gathering all necessary documents first, then move on to completing one section at a time.
Moreover, setting a specific date with a friend or partner to sit down and work on the tax return together can add a dose of motivation. Knowing that many people in your circle have already filed their tax returns can also be a powerful motivator, as we tend to follow social norms.
Finding Tax Filing Bearable:
To lessen tax-related stress and motivate yourself for early preparation, try the following:
- Break Down the Task: Divide the process of filing taxes into smaller, less daunting tasks.
- Recognize and Overcome Procrastination: Acknowledge the negative emotions that may drive procrastination, but understand that putting it off may only increase stress.
- Use Positive Reinforcement: Reward yourself after completing each task or reaching milestones in your tax preparation process.
Simplifying the Tax Filing Process:
- Leverage Technology: Use cloud-based accounting software and other digital tools to simplify tax preparation.
- Maintain Accurate and Organized Records: Regularly reconcile your financial records with bank statements, and use separate accounts for business and personal expenses.
- Create a Routine: Set aside specific times each month to review and update your financial records.
If tax preparation still feels overwhelming, consider hiring a tax professional to guide you through the process and alleviate emotional burden. And remember, early tax filing can help you avoid penalties and receive any tax refunds sooner. Here's to a stress-free tax season!
Source: ntv.de, Christoph Jaensch, dpa
Related:
- Tax assessment
- Income tax
- Tax office
- Tax return
- Tax tips
- Consumer
- Taxpayers' Association
- Employee
- Business finance
- Financial literacy
- Budgeting
- Saving money
- Personal finance
- Financial planning
- Retirement planning
- Investment management
- Financial services
- Wealth management
- The community policy could potentially address the procrastination individuals often experience when filing their tax returns, as understanding the behavioral factors behind this trend could help implement strategies to overcome it.
- In order to combat the fear and aversion many people feel towards filing their taxes, one could adopt a mindset shift, viewing the process as an opportunity to gain control over their personal-finance rather than a dreaded chore.
- Vocational training programs might help individuals who struggle with procrastination and organization to better manage their time and responsibilities, thus simplifying the tax filing process and reducing the stress associated with it.
- To make tax filing less daunting, individuals can use positive reinforcement techniques such as breaking the task into smaller, manageable sections, rewarding themselves after completing each one, and setting specific dates to work on the tax return with friends or business associates, fostering a sense of camaraderie and accountability in the communal effort to conquer the dread of tax season.
