It’s human nature to put off things that don’t fire you up. I usually put off cleaning my house until we have guests over and if you’re reading this, you probably put off doing your taxes until the last minute. No judgment here. If I wasn’t an accountant, I’d probably be in the same boat.
I’m sharing three tips to keep you sane while getting your taxes filed.
Don’t start using a new bookkeeping software.
At this point in tax season, you will only cause yourself piles of stress by trying to start using a new bookkeeping software to record the entire past year’s worth of transactions. Instead, open up a blank Excel spreadsheet and just start dumping all your income and expenses into it.
The spreadsheet doesn’t have to be super fancy. It just needs to have all your income totaled up, and all of the expenses totaled up by category. If you’re not sure what category something goes in, make one up! For example, if you’ve paid to attend a conference, put that in the “Education” category.
Creating categories for your expenses might feel weird, but remember: the IRS cares less about what something is called, and more about people over-reporting their expenses and not having proof of them (receipts).
Put all your tax docs in one folder.
Don’t let your tax documents float around your home. As soon as a tax document arrives in the mail, stick it in a designated folder. When you go to do your taxes, you’ll have everything in one place.
In addition to the forms you get in the mail, there may also be forms you have to download. This is common for Health Savings Accounts, student loan interest, brokerage statements and even W-2s from your employer. Either print these out and stick them in your folder or create a folder on your computer and save the PDF forms there.
Consider filing an extension.
If it’s just not possible to get your taxes accurately filed by April 15, you always have the option to file for an extension. Keep in mind, this extension isn’t an extension of time to pay your taxes, just an extension of time to file the forms. Try to get as much info as possible into the tax software to get an estimate of what you’ll owe, so you can pay that amount with your extension.
To file the extension, you’ll use Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This form is available on IRS.gov or through most online tax filing software. Most states accept the federal extension, but some require a state-specific extension form so check with your state’s department of revenue on this.
You’ll have the option to pay in any amount you want with the extension. To avoid being charged underpayment penalties and interest, it’s better to send in a little extra, if you can. Any overpayments will be paid back to you in the form of a tax refund.