Procrastinating About Your Taxes? Here’s How to Get Moving

This doesn’t have to hurt… yet.

That’s the takeaway I got this week after calling three tax professionals across the US, with roughly three weeks to go until the April 15 deadline for filing returns. The experts I called all agreed that if you haven’t started preparing yet, you’re definitely in “crunch time.” But their strategies were smart — and very relieving, perhaps even for the author of a personal-finance newsletter who hasn’t fired up his TurboTax yet, either.

About that deadline

First things first: Don’t let that date in the middle of April get in the way of an accurate return.

“April 15 is essentially an arbitrary deadline,” said Debra Taylor, chief tax strategist at Carson Wealth. “Sure, it’s nice to check the box. But if this is not available to you, like they say in yoga… Don’t push yourself to fit into some neat little box that was arbitrarily set decades ago and hasn’t really adjusted in any way to benefit taxpayers or tax preparers.”

Taylor’s point is that taxes have grown ever more complicated — along with our lives and our styles of gig work, freelance work, remote work — yet that deadline has remained frozen. Don’t beat yourself up if it’s just not going to happen this year. A completely acceptable solution is to file for an extension from the Internal Revenue Service. Just do it the right way.

How to think about extensions

The most important rule of thumb is that being communicative is going to cost you less than throwing your hands up in the air and avoiding the IRS entirely. Late-payment penalties are much less severe than late-filing penalties, says Jennifer MacMillan, president of the National Association of Enrolled Agents’ board of directors. The logic here is pretty clear: The IRS wants to know what you’re up to, even if you’re going to pay them later. They want to disincentivize keeping them in the dark, which makes filing for an extension by April 15 crucial if you need one.

Doing so gives you six months longer to get your federal return ready — and avoid incurring that late-filing penalty. But remember that an extension to file isn’t an extension to pay. Experts like MacMillan recommend doing back-of-the-envelope calculations on your estimated tax bill if you think you’ll end up owing, and then paying that amount. If, after you complete your return, you find that you overpaid, you can always get a refund.

MacMillan and other tax professionals want to explode the common myth that filing for an extension is an “audit red flag.” They also drive home the point that if you are audited, it’s better to have taken more time to do an accurate return than to make mistakes in the rush to be done by April 15.

Breaking it down

Maybe you just want all this off your plate. Maybe your return isn’t the most complicated and you know you can get it done on time, but you want some pointers on making the process less painful. This is where some suggestions from Yehuda Tenenbaum, founder of Y10 Tax Solutions, come in useful.

“The biggest thing that gets people to procrastinate doing their taxes is not having all of their documents,” Tenenbaum said. “So what I would probably recommend is to look at it as two different tasks.”

The first task is gathering documents. Find all the W2s, bank statements and 1099s that you might have scattered around both your physical and digital desktops. I speak from experience when I say that there is nothing worse than sitting down to file your taxes, suddenly realizing you’ve forgotten the password to some infrequently used account, guessing that password incorrectly, getting that account locked and then needing to call the bank, only to find out their helplines are closed.

But these things happen and Tenenbaum’s tip is to handle these tasks as one chunk and not to worry about filing your return until they’re all done. Once you get that part all in order (maybe this weekend?), you can then spend the next day or the next weekend plugging it all in. Dividing can be conquering.

Tenenbaum also recommends building in a little wiggle room, which you still have. Giving yourself extra time is going to take a lot of the stress off. But it will also ensure that you have a few business days to reach those banks, accountants or brokerage firms if you’re missing a document.

To my fellow procrastinators: Good luck.