If you break out into a cold sweat and your heart pounds when you simply look at April 15th on the calendar, you are not alone. You don’t have to panic, however, if you follow these simple steps to get your tax house in order for the season.
Since taxes are the second unavoidable thing in our lives (along with death), you need to approach the inevitable with a plan. Not only will the plan keep you on track, but it can help you avoid some costly mistakes, like not filing or missing critical deductions that may reduce your overall tax obligation.
Get a Grip
First off, do not panic. While you may have been very sloppy in your record keeping throughout the year, there is time to recover. Take a deep breath, settle your nerves and make a commitment to yourself and your business to do something about the situation. Create a timeline of when things need to be done, put the tasks on your calendar or to-do list and be methodical and relentless in your approach. And the first step to being methodical is to… organize.
We all know someone who meets with their tax advisor on April 14th with the proverbial shoe box of receipts. If you are the shoe box guy or gal, commit to getting those receipts organized by February 14th at the latest. Put that in your plan. If the task is so overwhelming that you can’t even face the prospect of sifting, categorizing and posting, consider outsourcing to someone who revels in nitty details (shameless plug for Cybertary acknowledged).
The point is, you are not doing yourself any favors by delaying and deferring what is, again, an inevitable task. In fact, you are causing yourself undue stress and possibly cha-ching if your $200 an hour accountant ends up doing the work or, worse, you miss out on critical deductions.
No man (or woman) is an island – several months ago, we wrote an article about seeking out professional resources and having this circle of advisors be in place to offer advice and counsel. Several accountants that I know would prefer to be consulted throughout the year on tax implications of decisions that you are making for your business. In this way, they can be true assets to you in planning and forecasting your business decisions.
There is no shame in acknowledging that others possess skills that we ourselves do not. Leverage your circle of professional resources sooner rather than later.
If you anticipate that you will not be able to meet the filing deadline due to circumstances beyond your control, file an extension. Contrary to popular belief, filing an extension will not make the IRS see a bull’s-eye on your return and immediately add you to the audit lottery. Don’t rely on the extension, however, if laziness is your only circumstance. If you do, you will just find yourself in the same situation six months down the road.
This tax season, send yourself a valentine by being prepared, organized and supported.
I heart me!