April 15th is quickly approaching and I wonder how are you feeling about that.
Empowered? Ready? Scared? Remorseful? Excited? In denial? Here are six ways to have a healthy relationship with money throughout the year and particularly during tax season.
1) Maintain a system for tracking your spending, saving and earning throughout the year. This is critical for sanity and ease when it comes time to file your taxes. My favorite tools? iReconcile App and the Money Minder.
2) Schedule an appointment with your beloved accountant for late February/early March. That should give you enough time to gather and organize your questions, the necessary paperwork and the notes you need to get the job done. I’m a person who works well with deadlines, but whatever you do, don’t wait until the last minute to have this conversation – create a buffer between a self-assigned due date and April 15th. If you don’t like, respect and trust your CPA, find a new one that you genuinely look forward to talking to.
3) Be organized, proactive, and clear about your business expenses and potential tax deductions. Need guidelines? Business Deductions – An Easy Explanation for Everyday People or, if you prefer, use the Schedule C Deductions Organizer.
4) Maintain a tax savings account and be diligent about funding it every month, no matter what. Use this account exclusively for taxes and keep it separate from your primary checking account. It’s “do not touch money” until quarterly payments are due. Need to separate church and state? Capital One 360.
5) Pay quarterly taxes. This will certainly soften the blow on April 15th. In fact, if you overpaid last year, you could practice the Rule of Thirds with your refund – 1/3 for past debts, 1/3 for current needs or wants and 1/3 for the future. Alternatively, you could apply the refund to your first quarter payment in 2015. How awesome would that be? Whatever it takes to keep your cool.
6) Have a good attitude. If you can’t beat ‘em, join ‘em, right? Paying taxes is inevitable so you might as well get with the program. Resisting and being grumpy about it isn’t going to help the situation. Set yourself up for a financial success story: take care of your money, accept your imperfection, be creative, seek out financial and business inspiration, motivate yourself in healthy ways, turn the lights on your relationship with money, think positively and go with the flow. Say Yes! Need to rewire scarcity thinking? Try reading Money Affirmations everyday.
I promise, tax season can be peaceful and even pleasurable. It starts by taking the reigns and doing your best to control the things you can. When you face your finances with an open mind, curiosity and a sense of humor, the rest will fall into place.