Tax Prep Anxiety

[PauletteGoddard]

I dread doing our taxes this year: my spouse sold his stock to pay down our car loan. We do not think about year-round tax planning.
I anticipate a low four-digit amount due to the Department of the Treasury. I have the money but hate sending it east.
Other than the satisfaction of avoiding tax penalties and possible criminal persecution, how do anxiety sufferers reward themselves for doing their taxes when they're 99.95% positive they owe? Do they reward yourself after doing the taxes, after they send them in, both times?
Am I the only anxiety sufferer with this premature discomfort?

[corn18]

I dread doing our taxes this year: my spouse sold his stock to pay down our car loan. We do not think about year-round tax planning.
I anticipate a low four-digit amount due to the Department of the Treasury. I have the money but hate sending it east.
Other than the satisfaction of avoiding tax penalties and possible criminal persecution, how do anxiety sufferers reward themselves for doing their taxes when they're 99.95% positive they owe? Do they reward yourself after doing the taxes, after they send them in, both times?
Am I the only anxiety sufferer with this premature discomfort?

My satisfaction comes by waiting until April 15th to hit transmit in TurboTax. And knowing I was the smart one and owed them as much money as possible without incurring a penalty. I am planning next year's taxes and trying to figure out if I want to go big and owe $10k+ or just leave it at around $2k. Haven't decided yet.

This year was a fluke in that I donated a horse to charity and that got me a small refund. Would have owed $5k without that (no penalty). I feel good about that because the charity got a nice horse and I got rid of $1,700 / month of expenses. Win, win.

Tom

[Like2Plan]

Am I the only anxiety sufferer with this premature discomfort?

I am getting better. Part of the reason I have had angst in the past was from all the paperwork (such as figuring out the cost basis from a stock sale ), etc. I have been working at reducing that, so it has made things better. I look forward to the day that I can file the short form.

This year, I am still waiting for a W2 from a former employer of DH's. We finally received an erroneous W2 on 6 Feb from the former employer that understated the amount he was paid (and all the corresponding withholdings). Supposedly, there is a corrected W2 in the mail.

I'm trying not to worry because there is nothing I can do about it until we give the former employer a chance to fix it. But, I worry that the corrected one is going to be messed up as well and my job (of filing taxes) is going to be more complicated...

[disneysteve]

I anticipate a low four-digit amount due to the Department of the Treasury. I have the money but hate sending it east.

This is where I am too. Thanks to some large capital gains on our taxable investments in 2013, we will have a big bill this year, probably in the mid to upper 4-digit numbers.

[creditcardfree]

Paulette, the sooner you do the calculations the sooner you will know the amount you owe and have time to figure out your plan to pay it. You might be surprised and it will be less than you think (one can hope, right?)!

[disneysteve]

time to figure out your plan to pay it.

That's the source of my anxiety - paying the bill. Also, adding to that is the fact that part of the higher tax bill will be from higher self-employment income which means I'm eligible to make a larger contribution to my SEP-IRA. Not only do I need to come up with the tax money, I also need to come up with that money.

[PauletteGoddard]

the sooner you do the calculations the sooner you will know the amount you owe and have time to figure out your plan to pay it. You might be surprised and it will be less than you think (one can hope, right?)!

Right. I am more anxious than usual today, could be pent up energy, but I have a hackle-raising fear this will be a brutal amount and will push my savings goals back by months.

Is everyone but me of the "oh well, 1040's off, no biggie, now to go do chores" temperament?

“The oldest and strongest emotion of mankind is fear, and the oldest and strongest kind of fear is fear of the unknown” -- H.P. Lovecraft

[creditcardfree]

I'm personally not worried only because I know we will only owe about $400, not thousands. I have that money and I have already done a preliminary return, so it is easy to be relaxed. I wish you could be as well.

[Caoineag]

I don't have anxiety about it but I also start estimating my taxes in the fall as soon as Taxact puts out its preview version. We are in the camp that if we aren't proactive with our taxes, we could end up owing penalties and we have wild swings in income. We aren't quite commission based difficulty but we get pretty close with bonuses and overtime.

[autoxer]

My satisfaction comes by waiting until April 15th to hit transmit in TurboTax. And knowing I was the smart one and owed them as much money as possible without incurring a penalty. I am planning next year's taxes and trying to figure out if I want to go big and owe $10k+ or just leave it at around $2k. Haven't decided yet.

Be careful with this strategy. I believe they can penalize you if you underpay by more than $1k. You don't want them to start tacking on interest.

[corn18]

Be careful with this strategy. I believe they can penalize you if you underpay by more than $1k. You don't want them to start tacking on interest.

Good point. There are very specific rules for when the penalty kicks in. My pay is going up a this year, so I have to pay at least 90% of the tax due or 110% of last year's taxes paid (it's 100% for GI < $150,000), whichever is less. SInce my pay is going up a lot this year, I have to hit 90% of my 2013 taxes paid.

[humandraydel]

Personally, NOT knowing the amount I owe would give me anxiety. Most years I actually estimate my taxes in December just so I'll know if I get a refund or owe. Then I usually don't actually fill out the forms until April.

[kork13]

I'm always a little anxious about my taxes this time of year, just because I know how outrageously complex it can be... and I've got a relatively **simple** return! I find the most stress-relieving thing is to just start working on them early. I normally start getting 1099/1098/W-2 forms around the end of January, so I just immediately start plugging all of that information into the tax software as I get it. I'm able to see the return as it comes together, and that keeps the anxiety at bay. Sometimes I get a large tax refund, other times I'll come out almost exactly even (the best I've done was a $17 tax refund one year), and occasionally I'll owe a small amount (though it's never been more than a few hundred dollars for me).

For this year (2013), because I deployed and half of my income was tax-free, I'm getting a much larger tax refund than I normally prefer ($1800+)... But even if I were to owe the same amount, I just take the money out of savings and just don't worry about it. Sure, that's money out of pocket, but it's unavoidable...so no reason to stress about the money itself. I'm generally more concerned about the risk of screwing something up than having to owe additional tax. I just finished & filed my taxes last night, and I put those concerns to bed for the year.

In my mind, do your taxes earlier than later. Even if you owe, I'd just pull the money from savings, and submit the return ASAP to reduce the stress of having your taxes hanging over you. Sure, you lose control of that money a month or two early, but really, that's a small price to pay for reduced stress. (Think about it... $2k earning even 5% in a bond or CD "costs" you about $15 in lost income. That's less than half the price of a 30-minute massage -- pick your stress reliever. )

[bjl584]

I pay estimated taxes quarterly. I know I'm going to owe, and I can guess pretty close how much. Paying estimated taxes definitely takes the sting out of April 15th.

[LizfromtheBronx]

I've always gotten a refund, so I'm usually on the other side of the anxiety - in mid January I start getting all twitchy about collecting my forms so I can file ASAP. Just adjusted my withholding (this was the first year that my tax situation allowed for it), so I don't anticipate getting a large refund at all next year. I'll probably be much more relaxed about the whole thing. If I were in a situation where I was going to owe, I would want to do the tax prep as soon as I could, so I would at least KNOW what the amount was, but wouldn't actually file until the 15th.