It’s Friday afternoon and taxes are due on Tuesday April 18th this year. (Yes they are usually due April 15th, but since the 15th falls on a Saturday and Monday is the Patriot’s Day holiday, everyone has until April 18th!)
So how are you feeling right now about your taxes… happy you got them done, annoyed at the surprise of how much you owe, or already doing the mental math to spend your refund?
OWN YOUR MONEY TIPS: Whether you have filed your taxes already yet or not, I have a few quick tax pointers for you..
Look at your tax prep process… Is your process easy or painful each year?
NOW: Most people procrastinate because they don’t have a process that supports accumulation of the amounts all year long. So come tax time, you have a huge mountain in front of you to tackle.
ACTION STEPS: Spend 15 minutes over the next week – that’s all it takes, 15 minutes max – to reflect on the few parts that were particularly tough AND how you can make it easier on yourself next year. Here are some easy examples: Could you track your money each month so you just review the summary at the end of the year? Could you more clearly separate your personal from your business accounts better? (This was a game changer for me!) Could you keep a file for all 2017 tax related documents, like donation receipts and eventually 1099s and such, so you know exactly where to look then you need them?
Haven’t filed yet? It’s ok – ditch the stress and follow these steps instead.
NOW: You can file an extension (Use IRS Form 4868) and approval is automatic. Then you will have until October 16, 2017 to file your tax return. BUT – and this is a big BUT – although filing for an extension gives you more time to file the return calculations itself, it does NOT give you more time to pay the taxes you owe. (Thus if you don’t pay, you will have penalties on all amounts owed.)
ACTION STEPS: Rather than rushing to complete your whole return and possibly make mistakes, do your best to estimate the amount and file an extension. Then set your own deadline – say by April 30th – to review everything and get it all filed correctly.
(Do NOT let the date come and go without filing an extension, or your bill will be inflated by failure-to-file penalties, underpayment fines, and interest on the balance. Ugh!
Not sure how to estimate what to pay? Compare your major items (net business income, W-2 income, rental income, etc.) to the prior year total tax due (line 61) and estimate that this year will be that amount again plus 10%. (I do + 10% as I prefer to be conservative given our fast growing business, and as long as you pay the prior year tax amount plus 10%, you won’t have any penalties.)
If you can’t pay the estimated amount due, you have 3 choices: (1) Ask the IRS for an additional 120 days to make your payment, (2) Get an installment plan with the IRS, or (3) pay your taxes with your credit card.
More info on each option from this helpful article aptly titled: Tax Tips for Procrastinators.
Please Note: I am a CPA but I am not a tax accountant, nor do I play one on TV – or in my email articles – so please consult with your tax advisor on your personal situation.
MOST IMPORTANTLY… Know that it can get better, and make a commitment for it to be so! Nothing will change if nothing changes. Here’s some inspiration from a few of our Making Money Academy members who posted these great wins lately…
Anna shared, “For the first time in my life, income taxes were done and handed in early. I had caught up and completed three years I was behind because of this course!”
And Mary Ann, who shared that her and her husband were working on their taxes and had a “big win for us when our daughter came in and said this was the first time ever I remember the two of you doing your taxes and you weren’t fighting!”
Lastly, when Bethany chimed in “I totally understand! Usually my husband and I have at least one argument and fume session during tax season. This year was the first year doing taxes for our LLC too so the pressure was on. We really took a lot of time to have a good breakfast, have snacks available, had lots of water and did some meditation before starting and it really paid off! No fighting whatsoever!”
Do you struggle with getting your taxes filed? Let me know by commenting below and I’ll help you through it so next year you can be a success story like these Academy members too!
WANT MORE TIPS ON OTHER ITEMS BESIDES TAXES?
Check out this week’s Daily Money Minutes for more practical and mindset support to take the worry and fear out of your life with money:
Here’s to your rich life!
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