With the April 15 filing deadline less than a month away, tax season is in full swing. If that gives you heart palpitations, take a deep breath. Here are five great ways to relieve seasonal stress and put a little zen into your tax preparation.
- Dont sweat the small stuff. If youre driving yourself crazy accounting for every last receipt or monthly bank statement, stop. Do your homework so you know whats deductible and whats not. Instead of spending your time chasing smaller deductions, focus on larger expenses that will save you the most on your taxes.
- Dont bait the IRS. Save yourself from a panic attack by avoiding audit triggers like claiming large deductions on minimal income or reporting dependent exemptions for people who may not actually be your dependents. If you report a business loss year after year, you risk having the IRS declare your company a hobby. Filling in your Schedule C with rounded numbers in the hundreds or thousands can be another red flag.
- Embrace technology. Want to make your life easier? Invest in accounting software that automatically tracks your income and tax-deductible expenses. Many are relatively inexpensive, and some are even free. But steer clear of software thats designed for professional accountants. If its too complicated, you probably wont use it.
- Hire a pro. Spare your sanity – and your pocketbook – by hiring a professional who will get your tax return done right the first time. If you charge by the hour, think of all the money youll save by not having to waste billable hours on your taxes. And given the write-off savvy of most professional accountants, chances are they can lower your tax bill.
- Buy yourself time. Running late and cracking under the pressure? Give yourself a break and file an extension. Waiting until the last minute will only increase your chances of making mistakes on your return – or missing the deadline altogether. And while youre at it, consider filing early next year. Benefits of filing early include getting your refund faster, avoiding fraud, and reducing stress.
We recommend consulting a financial professional before making any changes to your portfolio, tax returns or filing status.