Strategize Your Approach: A Guide
Tackling Tax Apprehension: Strategies to Conquer the Fear of Filing Returns
We all know that feeling of putting off an unpleasant task — filling out tax returns might just be one of them. Millions of taxpayers consistently procrastinate, leading to a last-minute scramble. But why do we put it off, and how can we overcome it? To gain insights, we chatted with renowned behavioral economist, Thomas Mathar.
Mathar explains, "People typically prefer to delay complex or tough tasks, which exemplifies procrastination. Viewed through an economic or rational lens, it would make more sense to complete the tax return early, especially to receive a refund if one is due. However, human behavior often departs from rationality."
Here are some reasons for the fear of tax returns and strategies to tackle them:
- Complexity — The tax system may appear confusing and intimidating to many people, deterring them from jumping in and completing their returns.
- Lack of immediate reward — Application efforts are felt in the present (now), while any refund (when the reward is gained) is generally in the future. This immediate satisfaction gap can stifle motivation.
- No social pressure — There's no visible impetus for individuals to complete their returns early due to the lack of social pressure or visibility on filings.
- The absence of deadline-induced pressure — Without a firm deadline looming, there's little impetus to act. Only the pressure of the approaching deadline usually causes taxpayers to take action.
So, how can the oft-dreaded task of tax return filing be made more bearable?
To overcome the aversion, it's essential to adopt a new perspective: to view the task not as an unwanted obligation, but as an opportunity to gain greater control over one's financial situation. Instead of thinking, "Ugh, I have to do my taxes," think, "I'd feel really good if I've completed my taxes this year."
To help shift mindsets and motivate taxpayers to tackle these tasks earlier in the year:
- Motivational Methods
- Pair the Unpleasant with the Pleasant — Combine your tax work with something you enjoy (e.g., listening to a favorite podcast or indulging in a treat).
- Reward Yourself — Plan a reward after each completed section of the tax return.
- Scheduling and Planning
- Early Deadlines — Set yourself an earlier deadline than the official one to reduce stress and spread out the workload.
- Break Down the Task — Divide your tax preparation into smaller, manageable tasks to make the overall process seem less daunting.
- Technology Integration
- Use Preparation Tools — Employ tax preparation software that offers easy-to-follow guidance and reminders.
- Automate Efforts — Utilize apps and services to automate tasks like expense tracking and income reporting.
- Peer Support and Accountability
- Group Participation — Join online forums or local groups where people share experiences and offer support during the tax filing process.
- Peer Review System — Implement a system wherein friends or family members review each other's tax filings for accuracy and completeness.
- Educational Support
- Workshops/Seminars — Attend workshops or seminars to educate you on tax planning and behavioral finance, helping you understand the benefits of proactive tax management.
By integrating these strategies and positive mindset shifts, individuals can transform the once-dreaded tax filing process into a manageable, efficient, and more enjoyable chore.
- The complexity of the community policy, with regard to filing taxes, often causes procrastination, deterring individuals from initiating their vocational training earlier in the year.
- One strategy to tackle tax apprehension and overcome procrastination is to adopt a positive mindset towards taxes, viewing the task as an opportunity to improve personal-finance and business-related matters rather than an unwanted obligation.
- apprehension about taxes can be alleviated by scheduling and planning, such as setting an earlier deadline, breaking down the task into manageable parts, or employing tax preparation software for guidance and reminders.
- In addition to these methods, peer support and accountability can play a strong role in empowering individuals to submit their tax returns earlier, through group participation, peer review systems, and educational workshops on tax planning and behavioral finance.
