We’re a week away from the tax filing deadline for most Americans. And, like many of you, I recently pulled out all my paperwork, did all my calculations and filed my taxes.
I typically file my own personal and corporate taxes, and have some thoughts on things I’ve learned by doing this myself for the past 9 years.
- It is not necessarily a good idea to do your own taxes.
If you do, I highly recommend having a back up plan in place. I paid a professional to do them for the first couple of years I owned my business. The nice thing for me was that the professional also happened to be a personal friend and mentor who encouraged me and assured me that I knew the basic things I needed to be able to do it myself. Also, my tax situation is uncomplicated. And if something changes, I know I can call her and have her do my taxes for me again.
p.s. I still do technically “pay a professional” to file my taxes. I just download the software from the company where my friend works, so that if I need a professional to follow-up, I can have her look at them.
- The amount of angst you feel about doing your taxes is directly proportional to the relief you will feel when they are done.
I am very prone to work-crastinating (doing all the other work I could possibly do — including Mari Konding my linen closet) to avoid doing my taxes. But, once I sit down and do it, it is a huge relief to have it done. If you’re reading this post to avoid doing your taxes, I promise, it won’t be that bad, and you’ll be so relieved when it’s done.
- The IRS website is surprisingly helpful and user-friendly.
The search features on the website are helpful and if you have a question about your taxes, every tax form has a corresponding instruction page (so if you file your taxes using form 1040, which is the most common, there is a 1040i form that answers a lot of questions about how it works). It is amazing how much time you can save your tax professional friends by looking up the answers on irs.gov
I also feel like you can learn a lot about tax policy and how it affects you by reading the instruction forms. I feel like giving yourself that familiarity with the forms helps you think of the IRS as less of a boogie man.
(Also pro tip: if you have a tax issue, the IRS is MUCH more willing to work with you before you miss a tax payment or have some other filing issue than after. But if you’re in that “after” place, they’re also much more willing to work with you if you tell them about your problem than if they have to tell you about it.)
- The numbers will speak to you
Maybe this is the math lover in me speaking, but one reason I enjoy filing my own tax returns is that I find the process of examining my own business (and personal finances) with a fine tooth comb to be incredibly revealing. Filing a corporate tax return is a much more detailed process than filing a personal return (which is why most people hire a professional). It requires you to document all of your expenses — for marketing, travel, insurance, rent, payroll, utilities, telephone, and more. I find that looking at all those receipts and numbers again, months away from the emotional experience of spending the money, is a useful opportunity to examine your spending.
Filing my taxes in the past has inspired me to change my phone plan, replace my fluorescent lightbulbs with high-efficiency LED lightbulbs, adjust my marketing strategy, and change locations.
I am not a huge fan of shaming people for buying coffee at a coffee shop when they could make it at home (because I love coffee shops) and the accompanying nickel and dime method of saving money. But looking at your numbers DOES help you see that the course of a year it actually might be worth the effort drop the landline, be more efficient with your electricity, or make other changes.
- Owing more than you expected in taxes stinks, and I’m sorry if it happens to you. I have only underpaid on my taxes once, and it stunk. If you’re in this boat, my condolences.
On the Banks 