Last Updated Apr 21, 2011 1:09 PM EDT
If the description of that movie could also apply to your tax filing experience, take heart. You can take a few steps this week to make next year less of a horror show. Before you shove your 2010 return in a box in the basement, look it over, and resolve to make next year better.
If you filed for an extension, stay on it. Yes, you get six months until your return is due. But do yourself a favor and try to wrap it up before the summer. "Before you know it, October is here," Chilcote says. "You blink and we're again two weeks from when the tax is due." Besides, taxes for 2010 are like looking in the rearview mirror. Put the year behind you and focus on the future instead of constantly playing catch-up.
Test out some financial planning software. Take an hour or two over Easter vacation and set up your money information with personal finance software like Yodlee, Mint or moneyStrands. Next spring when you file, you'll have information more readily available than if you have to thumb through 12 months of your checkbook register.
Digitize other important records. Barbara Kogen, CPA, a partner with NSBN LLP in Beverly Hills, California, says her firm now gives clients their returns on CD. They can request a paper copy if they'd like, but "while you're in the tax mindset, think about creating digital copies of important documents like past returns, wills and trusts," Kogen says.
Tax rates are heading north. The 15% tax rate on long term capital gains is likely to be a thing of the past by the end of 2012. "I doubt we're ever going to see them any lower," Kogen says. Is it time to let go of a few of your winners, exercise stock options or even take larger IRA distributions? Have the discussion with your accountant now and make a plan for the year.
Think about credits now. A few examples: Having a baby and planning to pay for daycare or a nanny so you can work? Get organized for the Child and Dependent Care Credit. Tax credits for energy efficiency upgrades to your home have been extended for 2011, though at lower levels. (Plan that windows project.) Maybe you can lump your medical expenses, including dental work, into 2011 to qualify for that deduction. Best to look ahead and budget.
Do a gut check. Whew. The return is filed, and your refund is on its way. If it's a big one -- and year after year you get big refunds -- adjust your withholding to get more in your paycheck each week. But don't forget that your tax return is a snapshot of how you're doing. Are there blanks on the lines for, say, interest, dividends, capital gains and IRA deductions? "The big thing I ask people is, 'What is your plan for the future?'" Chilcote says. "If you're telling me you want to have a good retirement and you want to have a successful business, and your tax return numbers don't reflect that, what are you going to do this year that's a change from what you did last year?"