Tax Tip #1: Stop Freaking Out About Taxes


This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.



As April 15 approaches, MoneyWatch is publishing daily tax tips. Please check back frequently for the latest advice from our experts.

Tick-tock, tick-tock ... that's not time running out on the US Hockey Team yesterday (boo-hoo), that's the big, bad tax clock in your head, telling you to get cracking on your tax preparation. Starting today, the MoneyWatch Team will provide you with daily tax tips to nudge you along in the process.

We'll also be providing longer tax planning articles like this and this.

(AP)

That said, when our Managing Editor asked if I would kick-off the series, I knew exactly what the first tip should be: stop freaking out about taxes.

From tax prep to tax savings, I've found that people make the entire process worse than it should be. Of course the IRS gets a big assist in creating a system that requires too much time and energy, but many become apoplectic at thought of taxes. It's to these anxiety-ridden would-be filers that I wish to speak.

There's a fairly simple way to make your life easier before you start: gather all of your tax documents. If you're like me, just keep a folder that says "Tax Documents." Throughout the year, file anything that is even remotely related to taxes in it. If your stuff is scattered, you'll have to spend extra time this time, but you'll get there - really, you will.

Then grab last year's return and use it as a guide to organize this year's data. If you work with a CPA, you've probably received that nifty "Tax Organizer" which will help. If you prepare your own taxes, Google "tax organizer" and you'll see plenty of templates you can use.

There are a bunch of special tax rules that are in effect this year due to the economic meltdown, so be sure to go through this stuff carefully. (Don't be discouraged - I promise that a reward awaits at the end of this process!)

I used to tell one of my clients that the time to make herself crazy about how much she's paying in taxes is not at the moment she is preparing to file. For most, the damage is already done and fretting about it during prep-time is probably not going to help you and may even prevent you from completing your return as efficiently as possible. But, you should use these feelings to motivate you to do it differently next year.

Finally, I like to complete the process with a reward. You can chose anything - maybe a delicious sweet thing or an indulgent hour of mindless television. I like to use a glass of single-malt scotch as motivation. After signing the return, I savor my reward and toast to yet another successful year of tax prep.


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(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
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    Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

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