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.
Don’t Sweat the Small Stuff
If youâ€™re driving yourself crazy accounting for every last receipt or monthly bank statement, stop. Do your homework so you know whatâ€™s deductible and whatâ€™s not. Instead of spending your time chasing smaller deductions, focus on larger expenses that will save you the most on your taxes.
Donâ€™t 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.
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 thatâ€™s designed for professional accountants. If itâ€™s too complicated, you probably wonâ€™t use it.
Hire a ProfessionalÂ
Spare your sanity â€“ and your pocketbook â€“ 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 youâ€™ll 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 â€“Â or missing the deadline altogether. And while youâ€™re 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.