Not Taxing Yourself At Tax Season
In the last blog “Managing Tax Season Stress” I offered suggestions for staying calm, clear, focused and organized as a way of life, and especially during tax season. As a gentle reminder, after you read this blog, I’d like you to go back to that blog and see if you are doing all you can to support your mental and physical health as you navigate this tax season.
Our body responds to our finances as a natural, biological way to protect us from real or imaginary fear and danger. If we are not in the right state of mind, or able to find an optimal level of safety and peace around our finances, we put unnecessary anxiety on our physical bodies. Anxiety is physically difficult as an isolated event, but when it becomes cumulative, we will inevitably develop chronic health issues.
There is something reassuring about having our financial house in order; our taxes, our healthcare, our retirement, and a budget we can follow give us the reassurance that we have taken care of our basic needs. Tune in to your outside world and check in to your inner world – your physical GPS – and see what your gut tells you. Follow your gut, follow your intuition. At the end of the day, only you are in charge of your journey.
Here are a few more suggestions:
1. Don’t procrastinate.
If you feel frozen or stuck, find a way to mobilize and move yourself forward. Calm yourself with soothing music, walk your dog, or simply take some deep and invigorating breaths to center yourself and feel grounded.
The extent of your commitment to take conscious action around your financial life will determine where you end up in 10, 20 or 30 years. I see a lot of folks in their 60s who ignored all the red blinking lights and are now scrambling at an older age to stay afloat.
Resist the temptation to put off your taxes until the very last minute. Rushing to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error, not to mention create more stress on yourself, both mentally and physically.
2. Don’t panic if you can’t pay.
If you can’t pay the full amount of the taxes you owe by the April 15th deadline, file your return by the deadline and pay as much as you can to avoid penalties and interest. More than 75 percent of taxpayers eligible for an Installment Agreement can apply using the web-based online payment agreement application available at http://www.irs.gov/Individuals/Online-Payment-Agreement-Application. You can also contact the IRS to discuss your payment options.
3. Get support.
In the last recession, many people who later filed for bankruptcy had isolated themselves because of the shame they felt in admitting they were in trouble. Don’t be one of those folks. Help is only a few clicks or a phone call away. Consider who you have on your financial team. Maybe a friend or a relative has the expertise you need. If not, pay an expert to advise you of your rights and your obligations.
4. File an extension.
If you just can’t get it together by April 15, request an extension of time to file – and be sure the extension request is postmarked by April 17. If the deadline clock is ticking, you can get an automatic six-month extension through Oct. 15. Please note, this extension to file does relieve the requirement to pay your taxes in full. And if you have not paid at least 90 percent of the total tax amount due by the April deadline, you may be subject to an estimated tax penalty. Obtain a filing extension through Free File at www.irs.gov/freefile. You can also file Form 4868, The Application for Automatic Extension of Time to File a U.S. Individual Income Tax Return, available for downloading at www.irs.gov or by calling 800-TAX-FORM (800-829-3676) to have a paper form mailed to you. Allow at least 10 days for mailed forms and publications.
Why Is This Important
Living in the US offers us citizens certain rights and privileges. In exchange, filing and paying taxes are obligations every working person in the United States must honor. We are a part of the collective that must be sustained. Our infrastructure must be maintained to support public services of all kinds. If that does not move you, see your tax contribution as an act of generosity, or a reciprocal exchange that allows you to live in one of the most democratic and geographically majestic places in the world.
As I’ve mentioned before, the three main stressors we experience in America revolve around money – namely making it, spending it and saving it.
My book, “The Money Anxiety Cure: A Path To Financial Wellbeing” offers useful tools to manage financial stress and anxiety, and to navigate through your financial journey with greater awareness and clarity while you stay kind and compassionate with yourself and others.