Beating the Blahs on Tax Time? Follow These Steps to Stay on Track
Adopting this method is the key:
Everyone knows about kicking the can down the road when it comes to doing something unpleasant—filling out tax returns falls squarely into that category. As the deadline looms, we asked behavioral economist Thomas Mathar for insights on why we procrastinate and how to overcome it.
Mathar, why do people delay filing their tax returns?
Mathar: It's all about avoiding unpleasant or complicated tasks. Economically speaking, filing early is the smart move, but behaviorally, the system can be confusing and making mistakes is a fear for many. There's also no immediate reward for the effort, and no social pressure for doing it earlier. Plus, the only incentive to act comes right before the deadline.
What's behind our aversion to tax returns, and how can we change it?
Our aversion is often emotional and based on previous experiences or misconceptions. A fresh perspective is key. Instead of thinking "Ugh, gotta do the tax return but gotta do it," try asking yourself "Wow, this could be a great opportunity to gain control over my financial situation." Instead of focusing on the bureaucracy, see it as a chance to get a check-up on your yearly finances.
So, what can we do to get moving on tax time earlier in the year?
- Tie the task to a pleasure: Make a rule that you can have that piece of cake you've been craving once you've completed a section of the return. Or reward yourself with a short break after each task finished.
- Break it down: Don't try to tackle the whole return at once. Instead, break it up into smaller steps. Start by collecting your receipts or reviewing your expenses.
- Schedule a session: Set a specific date and time to work on your return with a friend or partner, or use reminders to keep yourself on track.
- Leverage social norms: Knowing that others have already filed their returns can be a powerful motivator—we tend to follow the majority.
What changes are coming for tax assessments in 2025?
Instead of just pushing us to avoid penalties, let's make tax filing easier, more rewarding, and less intimidating by streamlining the process and focusing on benefits.
ABOUT THOMAS MATHAR: Dr. Thomas Mathar leads the Center for Behavioral Research at Aegon UK, a British provider of investment and financial services. As a behavioral economist, he studies the factors that influence our financial decisions.
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Practical Tips
- Chunk it: Break the process into smaller, more manageable tasks—like organizing receipts, reviewing expenses, or entering data into tax software.
- Set a Plan: Schedule your tasks and set deadlines to help you stay focused and avoid becoming overwhelmed.
- Track in Real-Time: Keep track of your income and expenses on a monthly basis, especially if you're a small business owner.
- Separate your Finances: Keep personal and business finances distinct to make tax preparation easier.
- Get Organized: Collect your documentation early and keep it organized to save time during tax season.
Motivational Methods
- Rewards System: Reward yourself with small treats after completing each task to build a positive association with tax filing.
- Mindfulness: Practice mindfulness and deep breathing to minimize anxiety when you feel overwhelmed.
- Self-Encouragement: Remind yourself of the benefits of timely and accurate tax filing, such as avoiding penalties and maximizing potential refunds.
- Seek Support: Consider hiring a tax professional to help make the process less daunting and to provide peace of mind.
- Refocus on Benefits: Keep your eye on the prize: filing your taxes will help you stay within budget and give you a clear picture of your financial health.
By incorporating these strategies, you can turn the chore of tax filing into an opportunity to save money, improve your budgeting practices, and gain greater control over your financial future.
- Delaying the submission of tax returns is often due to the avoidance of complex tasks and the fear of making mistakes, according to behavioral economist Thomas Mathar.
- Our aversion to tax returns can be emotional, stemming from previous experiences or misconceptions, and can be changed by adopting a fresh perspective, viewing tax filing as an opportunity to gain control over personal finances.
- To get moving on tax time earlier in the year, one can tie the task to a pleasure, break it down into smaller steps, schedule a session, and leverage social norms.
- In 2025, changes are expected in tax assessments, focusing on making the process easier, more rewarding, and less intimidating by streamlining the system and concentrating on benefits.
