Easing The Stress of Tax Preparation: Here's How

For some people, filing a tax return is a simple task that takes less than an hour. For others, tax season is a little more involved and a lot more stressful. If the latter category sounds familiar to you, here are three ways to reduce tax-related stress at the end of the financial year.

1. Put Aside Money for Estimated Taxes

Depending on your employment, any untaxed income will need to be declared in your tax return. This is a common practice for sole traders or small business owners. If you fit into this bracket, you’d know that your annual tax obligations are due shortly after filing your tax return. To prevent any unwelcome surprises, make sure you’re consistently putting aside money to pay your estimated tax bill at the end of the financial year.

2. Review Previous Tax Returns

Looking back over previous tax statements can help you improve the way you approach future tax returns. Previous tax returns can also be used to proactively identify the most stressful aspects of tax filing. Once you have identified these problematic sections, you can then take steps to alleviate future stress, such as asking for clarification from a professional tax agent or pre-collecting the required documentation.

3. Keep Relevant Documentation in a Single Location

Chasing down missing receipts or incomplete investment statements is the last thing anyone wants to do when filing their tax return, this is especially true for people who own their own business or side hustle. To minimize the stress of constantly searching for tax documents, make sure all your deductible-related documentation and proof of expenses is tidily organized in a single location.

Photo: Pexels

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