The Art of Love & Money Simple Steps for Tax Prep - Step 1

Simple Steps For Tax Prep – Step Three

We’ve been taking it pretty slow in the tax prep series.  Are you wondering when we are going to get to all of the standard tax tips that you read in all of the other tax prep articles?

We’re not.

I’m all about taking small steps that eliminate procrastination.  What I hope to give you in this series is the tools to get started on tax prep right away this year – and enough comfort in the process that next year, you are able to roll right through the steps without any dread.

These tips are all tax prep – as in pre-tax filing, not tips to make you feel like a tax professional.

Anti-Procrastination

What I am doing with this series is taking that voice that says

“You need to get your taxes filed!  It’s March, already!”

And the other voice goes

“Ugggggggh!  I don’t want to do that!  Let’s binge watch Netflix.  Ooooh! That was a good series!  I wish there were more than 12 episodes.  Fine, let’s do the taxes.  But first I neeeeeeed to clean my inbox.  Man, I think this job calls for cup of coffee.”

Coffee ensues.  Need creamer.  Run to grocery store.  Now need to clean fridge and put away groceries.  Now we’re putting the cold coffee in the fridge for iced coffee later.  Make a new cup, nestle in with a hot cup of coffee and…..

“ooooh!  Anthropologie is having a sale!”

Six hours have passed and no tax prep has ensued.

The only issue is that the “need to get taxes done” voice wakes you at 2 a.m. or continues to pop in while you are making dinner the next day or while you are at work a week from now.  It’s exhausting, it drains your energy – and for no reason at all – because nothing is getting done!

It’s the worst.

So let’s make tax prep super simple instead.  Next time you have the thought:  I need to start on the taxes, I hope you think:

“All I need is a manila envelope and a sharpie marker.”

See Step One & Step Two if you missed out.

Then you can back to binge watching Netflix on a Saturday in peace.  With your tax prep behind you.

Step 3:Get Your Documents in Order.

Sort the documents you already have in the manila folder from Step One & Step Two  using the tax prep cover sheets for each section.

As you sort through each section of the tax organizer and fulfill each piece of information along the way, use a pen to tick off the check boxes.

Get some paper clips. Clip the documents to the section.

Make a post-it note of those documents you still need.

We’ll get to take care of those in Step Four next week.

Think Ahead: Everybody loves a windfall.

Everybody loves a windfall, but no one loves that lonely, tumble weed across the deserted highway feeling that comes when it’s May and you’re flat broke wondering what happened to that refund.

If you are anticipating a tax refund, now is a good time to determine what you want to do with any windfalls you may receive.

Really spend sometime in a dreamy place. Pick a few things you want to do with the windfall now. You will definitely need to readjust when you know real figures, but having a plan in place, with the accounts already setup will have you in a good spot to follow through and completely transform you life.

Think about creating a buffer in your checking account – or a curve ball category in your budget, paying down debt, building an emergency fund, paying for some long awaited home repairs, setting aside a portion for vacation this summer, or a small portion to buy yourself something nice.

Have a plan in place – in your heart, in your head, & in your paperwork for what you want yo use the refund for before you see the refund amount and before you get all lusty after shiny objects that will blow in like the wind, and out with the goodwill donation boxes next fall.

If you, like me, have to pay in at the end of the year instead of getting a refund, have a thought for where you will scratch the cash together. It’s sad, but true.

Step 3: Get your documents in order. Check the box if it is fulfilled. Make a post-it note of those documents you still need to gather.  Spend some time thinking ahead to refunds and/or the tax bill.

 

Rachelle Magadan

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