Haven't Filed Your Taxes? First, Take Stress Out of the Equation
WHY YOU SHOULD CARE
Because taxes are here to stay.
By Blaire Briody
OZY and JPMorgan Chase have partnered to take a deeper look at how businesses can impact society for the better. Enjoy the rest of our special series here.
Nothing seems to raise blood pressure levels like an impending tax-filing deadline. In addition to work and family demands, adding “file taxes” to your to-do list can feel like a daunting and anxiety-ridden task. Many Americans turn to procrastination to cope. According to the IRS:
Last year, more than 11 million taxpayers filed for an extension, up 0.9 percent from 2016.
“Often people procrastinate as a way of avoiding the task,” says Amy Przeworski, a psychology professor at Case Western Reserve University. But “procrastination further increases anxiety as people feel even more pressured to complete their taxes as the deadline looms on the horizon.”
But putting off filing can mean putting off getting a much needed tax refund. More than 70 percent of taxpayers are expected to receive refunds this year; the average refund last year was $2,895. Rather than put off filing, and delaying the return of your own money, it’s a good idea to rethink the entire process so that it feels less daunting. Here are some key ways to accomplish that.
1. Plan Ahead
The best way to battle anxiety is to take action, according to Meg Selig, author of Changepower! 37 Secrets to Habit Change Success. She advocates scheduling blocks of time to tackle filing.
“Put ‘do taxes’ in your daily planner at a specific time every day. When that time rolls around, do it,” Selig says. This will help lower the stress of knowing you have a difficult task ahead of you.
2. Break it Down
Part of what seems overwhelming is the amount of time it takes to sort through all the paperwork and receipts. Przeworski advises spreading it out, and completing one task each day.
“Gather together the important documents one day. Tackle your state taxes another day. Work on your federal taxes a different day,” Przeworski says. “After each step, reward yourself for accomplishing your goal with time to relax.”
3. Don’t Stress About the Bill
If you’ve crunched the numbers and find that you owe the IRS more than you accounted for, the best plan of action, says Selig, is to accept the situation and pay the bill rather than stress about it. If you can’t pay, contact the IRS or a free tax service in your community, such as the Volunteer Income Tax Assistance Program and Ladder Up, to find out about your choices.
4. Spend Your Refund Wisely
Don’t let your refund be another source of stress. When it arrives, be mindful of how you spend it (after all, there’s only so much of it to go around). Selig advises taking care of the important stuff first, like paying off debt or adding to your emergency savings. According to a January 2018 JPMorgan Chase Institute report, a number of Americans choose to spend their tax refund on health care, like dentist or doctor visits, or paying outstanding hospital bills. The study of 1.2 million checking account holders found that consumers increased their health care spending by 60 percent in the week after receiving a tax refund.
If there’s money left over, consider doing something nice for yourself, like taking a vacation, going out to dinner or giving to charity, suggests Selig. “Happiness research tells us that if you want to be happy, be generous to others,” she says. “Even writing a check for just $10 to your favorite charity will activate those feel-good chemicals in your brain.”
- Blaire Briody, OZY Author Contact Blaire Briody