Do you find yourself stressed out around tax time? What about even thinking about doing your taxes? If so, you are not alone. Taxes are often thought of as a dreaded part of the year causing stress and leaving people feeling overwhelmed and depressed.
Why Are Taxes So Stressful?
Sure, the act of filing taxes can be daunting, but there just might be more to it to explain why people are so stressed out about taxes. Here are some reasons you might be stressed when you think about doing your taxes this year and also how you can deal with that stress as the tax deadline nears.
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You’re Dealing with Money
Ask people what their greatest stress is and chances are they are going to say money. People stress about not having enough money, not understanding money, spending too much money, not handling it well, not having a savings, not earning enough, and everything beyond that. Tax time can bring up stressful financial issues that occurred throughout the year. It can be especially stressful if you end up owing the IRS.
How to deal: Find ways to cope with the stress of taxes. Before you start your taxes, you may even want to take an in-depth look at your finances so you understand what your current situation is. Whether good or bad, understanding where you are at financially, can reduce some of the stress of not knowing.
You are Afraid of Being Audited
An audit is often a misunderstood, scary process. Too often people are scared to claim deductions or report certain things (like the Home Office Tax Deduction) because they believe it might flag an audit.
How to deal: First, understand what exactly an audit is and what happens when you’re being audited. This may alleviate some of the mystery of an audit and better explain what it is. Second, you can do things to reduce your chances of being audited. Fill out your taxes carefully to reduce mistakes and errors which can lead to an audit. Be sure your numbers add up and match any documents that were already sent to the IRS. Also, understand how tax brackets and tax laws work to know what you can get.
You are Intimidated by the Government
Many people are intimidated by the IRS, and it might seem like a scary thing.
How to deal: If you fill out your taxes correctly, you don’t have to worry. Keep your receipts and paperwork so if the IRS requests additional information from you or needs to do an audit, you can cooperate and make things easier for both parties.
It Causes Tension in Your Relationship
Once you are married and file with a spouse or domestic partner, it is now a joint responsibility. If you and your partner aren’t on the same page, this can cause fights and stress. Diving back into old financial arguments that happened throughout the year can occur and any previous resentment about spending issues or any other money issues can resurface. This can also bring light to any sensitive issues about one partner not feeling like they earn enough or being sensitive about the loss of a job or other negative financial situation that may have occurred throughout the year.
How to deal: Before jumping in to filing, make a game plan with your spouse. Go into it with a calm, patient, but thorough attitude. Don’t let issues escalate into an argument, and stay on point. Each of you can gather your specific documents like W2s, 1099s, or whatever else you have. Make a plan on how you should file. If you’re doing it on your own, have one spouse do it, as the other double checks his or her work. Have your spouse nearby so you can ask a question or get input if needed. If you’re getting it done by a tax professional, you should both be present in case a question or issue comes up that that specific person is needed for.
You are Disorganized
If you’re disorganized, you’re stressed. Whether it is specifically with taxes or with any other aspect of your life, being disorganized and not having a grasp on the situation is going to cause stress. Going through past business expenses for self employed deductions, searching for receipts and paperwork, and locating all of your important tax documents could get quite stressful if you haven’t been organized all year.
How to deal: Before you begin, make a list of what you need to file your taxes. Write down all of the paperwork and documents you’ll need. If you need to calculate what you spent on something, do that before beginning to file your taxes. Start a folder with all of your important documents you need to file and organize them by type. If you’ve already filed, learn from your mistakes and get organized for next year.
You Don’t Understand Tax Laws
Sometimes the stress associated with doing taxes is the result of not understanding the process of filing taxes, what taxes actually are, and the tax laws. People often wonder what applies to them, what doesn’t, and they may be unsure what type of credits or deductions they qualify for.
How to deal: Take time to learn which tax laws apply to you, how income is taxed and what you qualify for. Read credible sources from your local library or online which can make these issues clearer for you. If you file online using TurboTax, use their tax tips and video library. If you are still confused, consider visiting a trusted, friendly tax professional that not only can help you with your taxes, but also is willing to take the time to explain things to you so you know for next year.
Do taxes stress you out? Why or why not? How do you avoid the stress of taxes? How do you deal with it?