Monday, March 02, 2009

How to Reduce Stress this Tax Season

With all the organizing, filing, writing, researching, and calculating involved, many Americans find themselves over stressed every year over their tax returns. Tax season has always been a stressful time, but with the current economic situation, some people are getting stressed to the point of exhaustion. However, there are several steps you can take to reduce your stress this tax season, and still file with plenty of time to spare.

1. The early bird...

Once tax season begins, it is never too early to get started on organizing and filling out your tax documents. Hopefully you saved most of your tax records from last year, so that you can just copy the information from it. But even if you do not, it is always a good idea to get an early start on your tax returns. If you wait until too close to the deadline then you will find yourself overstressed trying to get everything taken care of before the cutoff.

2. Enlist a friend... or two

While most people prefer to handle their financial business solo, having a spouse, close friend, or family member around to help with your taxes can be helpful. Just because they’re around does not mean you need to share specific numbers. Rather, you can have them for support or answering simple tax questions. Trying to figure something out on your own can be difficult, and having the help of someone you trust can make the problem solving less difficult.

3. Read up on tax help

If taxes are confusing to you, it may just be due to a limited amount of knowledge about taxes. When it comes to tax returns, the more you know about the topic in general, the easier it will be for you to complete. There are dozens of articles, blogs, and even books dedicated to educating you on taxes and how to work the system to benefit your particular situation. I even penned a comprehensive book on the topic, which you can check out at

4. Put aside time

If you are the type of person who just likes to sit down and get a job done, be sure to set aside enough time for this important task. It can take hours to fill out and compile some trickier returns, so be sure to give you’re a healthy chunk of time, preferably a weekend when you know you will have time.

5. Ask around at work

Since the bulk of taxes revolve around your income taxes, it only makes since that asking around at the work place would be a good source for tax knowledge. You can ask specific coworkers about their tax returns, or even ask around at lunch to see if any one has finished their taxes yet this year and what they think. You may be surprised to see how many of your coworkers are willing to help!

6. Treat yourself... occasionally

Before you start on your tax returns, it is a good idea to make a few "stopping points", where you can take a break from working on your taxes and reward your self. Maybe pick up a box of your favorite cookies, or just have a new episode of your favorite show up and ready to watch for a nice little break. The idea is to reduce your stress and take the task slowly, so you do not rush through and make costly mistakes.

7. Update your tax knowledge

No matter how much you claim to know about last year’s taxes, there are always new updates to the United States tax code. Be sure to check the IRS website every year for information on new credits, deductions and rules. You may also find that some of your favorite credits or deductions have expired, which can help you avoid costly mistakes.

8. Remain Vigilant

In this economy, owing the IRS more than you expected can be quite a set-off. A lot of people stay ahead of the game by keeping money to pay taxes in a separate savings account. Make sure you remain vigilant with adjusting your withholdings or making your estimated tax payments throughout the year. If you still unexpectedly find yourself owing then you should probably meet with a tax professional.

9. Better Safe than Sorry

If you feel unsure about your return, take it to a professional to review. If you feel you may be taking too risky of a position in claiming a deduction or that you missed a credit or two, you might as well have a professional take a peek and/or a whack at it. Remember, the tax preparation fees may be deductible next year when preparing your return, so what are you waiting for?

10. Save everything for next year

Saving your tax documents and making copies of everything (especially your completed return) will help you a lot next tax season. If done correctly, next year all you need to do is look up updated tax codes and change the numbers.

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