4 Secret Tips for Avoiding Tax Procrastination
You’ve got just about a week till the tax filing deadline approaches on 4/18/2011! We’d all love to have our taxes done in the first week of March and our tax refund direct deposited just a few weeks later, but sometimes life gets in the way and we don’t file our tax returns until the very last minute. In fact, according to a TurboTax survey, almost 27% of taxpayers wait till the last two weeks before the tax deadline to file: we call them tax procrastinators.
Just try to walk into a post office on tax day and you’ll find a long line out the door of people who need to mail their tax return that day (and that’s even after many people have moved to electronic tax filing in 2011!). If you’ve already filed your taxes and you’re waiting on your tax refund, find out how to find your tax refund or visit the IRS “Where’s My Refund” tool to track your refund now.
Here are a few ideas on how to motivate yourself to get that return completed earlier:
Think Of The Refund
The average tax refund is around three thousand dollars according to the IRS, and that should be motivation enough to get your tax return completed as quickly as possible. Just think about all the useful things you can put that money towards. If you have some pesky credit card debt, use your refund to clear some or all of that away. Thinking about buying a house or car? That amount can go a long way towards getting the home or car of your dreams. If you’re due a refund, it makes absolute sense to process your return as quickly as possible. Think of the money you’re losing!
If you think there’s a lot of work to be done, it’s more likely that you’ll put it off until the very end. If you organize your tax documents as they come in, chances are your return won’t take as much time as you think. 1099-INT and W2 forms will arrive in mid to late February, so collate those as they come in because they will represent the vast majority of the paperwork you’ll need for your return. If you own a home, your bank will likely send that along with the 1099 forms. Once you get the forms, think back to the refund and get cracking on that return.
Don’t Do It All At Once
If you have a particularly pesky return that’ll take you several hours to complete, schedule an hour a day to put towards preparing your taxes. Hour one may be to collect all the documents you need. Hour two may be entering in that information. Hour three can be for answering all the other questions on the return. Hour four will be finishing up and reviewing your return. Break that out over four or five days and it’s less daunting of a task and one you’re more likely to completely.
Use Tools to Speed Up
Many tax preparation software packages will help you complete your return a lot faster than you think. So that initial estimate of four hours to complete your return may a vast over-estimate. Tax software, such as TurboTax, even import data, like W2 and 1099 information, directly from payroll processors and banks so that you won’t even need to enter that information. This type of integration is the future of tax preparation and it benefits you to take advantage of them. Also, if you use the same tax preparation software every year, much of your personal information will already be in the return.
Light the Competitive Fire
When it comes down to it, completing your taxes is a big game. It’s you vs. the government. You vs. the IRS. They would love to keep more of your money and the longer you wait, the longer they have it. That’s interest you are not earning. When you go to complete your taxes, approach it as you would any other competition. They set the rules, you have to beat them with it by getting the maximum refund you’re entitled to. Sometimes a little healthy competition is all you need to get you to action.
If all else fails, just think back to the first tip – think about your tax refund. If it takes you four hour to complete your return and you get the $3,000 average, you’re getting “paid” $750 an hour to do your taxes.