3 Top Tips to Help You Remain Calm and Collected During Tax Season

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Finance Insights for ProfessionalsThe latest thought leadership for Finance pros

Thursday, July 30, 2020

Tax season can be a busy period for many, but it needn't be stressful. You can stay calm and collected by following some simple advice.

Article 3 Minutes
3 Top Tips to Help You Remain Calm and Collected During Tax Season

For most people, filing taxes is a pain. However, when you’re responsible for a company’s finances it can be even less enjoyable, as a lot more is resting on your shoulders. A recent survey found 26% of taxpayers feel stressed or anxious about tax season, and given that stress can make you less productive and more prone to make mistakes, that’s an unfortunate combination.

In fact, the most common tax fear - held by 46% of Americans - is making a mistake. However, this doesn’t have to be the case. There are a number of simple ways you can avoid some or all of your tax stress.

The following tips will help you get your taxes filed more. Staying calm and collected during tax season is a great way to make sure you avoid penalties while effectively and efficiently maintaining control of the company’s taxes.

Avoid audit stress by being honest

One of the biggest stress induces when filing taxes is the risk of a time-consuming and expensive audit.

“A lot of people are very nervous about it because there’s the horror stories of people who’ve been audited. And the IRS has extraordinary enforcement powers.” Mike Repak, VP and Senior Estate Planner at Janney Montgomery Scott

 

However, the likelihood of this actually happening is surprisingly slim. The IRS audits 0.5% of all tax returns, and Daniel Laginess, a CPA and managing partner at Creative Financial Solutions, points out that they’re much more likely to audit either taxpayers in the highest tax brackets or those reporting no income at all. As long as you’re honest with your finances, you should be fine.

File as early as possible and alleviate the pressure

Around 40% of tax professionals report the same two things as their biggest fears when tax season rolls around:

  1. Late client information
  2. Time compression

When it comes to taxes, you’ll want as much processing time as possible. Luckily, you can file early, which is a great way to avoid one of the most common causes of tax stress.

Doing this not only gives you more time - and therefore less pressure - when it comes to doing your company’s taxes, but it also gives you a bigger opportunity to correct any mistakes you might make. In fact, some professionals believe you’re more likely to get a refund the earlier you file, as you’re less likely to miss smaller deductions or credits.

Don’t panic and remember an extension is available

If all else fails, you can always file for an extension. This shouldn’t be your first action and should only be requested if you’re struggling. If things get out of control, remember that an extension may be possible.

This will take some of the time pressure off, which in turn will make you less stressed and more productive. In other words, the more you keep an extension in mind, the less likely you are to need it.

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