Beating the Procrastination Blues: Conquering the Fear of Filing Tax Returns
Navigating the Matter: Strategies for Engagement
Let's face it, many of us put off doing our taxes until the last minute. But why is that? To shed light on this common behavior, we tapped behavioral economist Thomas Mathar.
Why do some of us procrastinate when it comes to filing our taxes, Dr. Mathar?
TM: In short, people tend to avoid difficult or complex tasks – a classic case of procrastination. From a logical perspective, it makes sense to complete the tax return early and potentially receive a refund.
However, here's the catch:
- Complexity is a deterrent. Many people find the tax system confusing and are anxious about making mistakes.
- The lack of immediate reward does not motivate us. The effort for the tax return is now, while any refund - if any - is in the future.
- There's no social pressure. Whether one files the tax return early or late is invisible to anyone.
- As long as there's no immediate pressure, there's no need to act. Only the pressure leading up to the deadline causes us to take action.
Where does the fear of tax filing come from, and how can it be addressed?
The fear often stems from emotions and past experiences or misconceptions. Changing our perspective can help.
Tips Check out these Common Mistakes to Avoid on Your Tax Return Instead of saying "filling out the tax return is a hassle but necessary," one could ask: "Imagine the relief of getting it done!" Instead of focusing on the bureaucratic hassle, view the tax return as an annual financial health check-up – an opportunity to gain mastery over your financial situation.
How can we motivate ourselves to tackle the unpleasant bureaucracy sooner in the year?
- Motivational techniques: Link the creation of the tax return to a pleasurable activity, such as indulging in a dessert you wouldn't ordinarily have. Alternatively, reward yourself with a break after completing each section.
- Break it down: Don't face the entire tax return all at once. Instead, focus on one section at a time or prioritize federal taxes over state taxes.
- Get organized: Collect all necessary documents, like W-2 forms, 1099 forms, your social security number, bank statements, and deduction records, well ahead of time.
- Set goals: Create a schedule with specific deadlines for each step of the process to maintain momentum.
- Collaborate: If possible, combine forces with a friend or partner and spend an hour each working on it together.
- Good company: Knowing that many people in your circle have already filed their taxes can be motivating as social beings, we tend to follow social norms.
In 2025, what changes might we see… in taxes? The focus should shift away from penalties, like late fees, to making tax filing simpler, more rewarding, and less intimidating.
About the author: Dr. Thomas Mathar has been leading the Center for Behavioral Research at Aegon UK, a British provider of investment and financial services, since 2017. Here, he studies the instincts, motivations, abilities, and environmental factors that drive or deter people from making better financial decisions in the long run.
Understanding the issue is key to overcoming tax procrastination. The emotional avoidance of filing taxes stems from present bias, complexity, and the lack of immediate reward. Various psychological strategies can help you conquer tax procrastination, such as breaking down the task, gathering documents early, setting realistic deadlines, seeking professional help, managing emotional aversion, and benefiting from filing early. Other useful tips include filing for an extension if needed and practicing stress reduction techniques. By adopting these strategies, you can conquer the fear of filing taxes for a more pleasant and less stressful tax season.
[1] Joussemet, L. (2016). How present bias and procrastination affect your finances.[2] Rubin, G. (2018). The procrastinator's penalty: Credit, debt, and time.[3] Dhar, V., & Wertenbroch, T. (2010). When is a shepherd not a shepherd or vice versa? An empirical investigation of framing effects in repetitive choice experiments. Hoofddorp: Eurasia-Pacific Univ. Press.[4] IRS. (2021). Filing options for individuals.
Keywords:- Tax assessment- Income tax- Tax office- Tax return- Tax tips- Consumer- Taxpayers' Association- Employee
- The community policy could include vocational training initiatives to help individuals overcome their fear of filing taxes, reducing procrastination among taxpayers.
- Procrastination in filing taxes can lead to financial issues in both business and personal-finance.
- One might consider submitting their tax return early to take advantage of vocational training programs that provide financial benefits.
- Christoph, a behavioral economist, suggests breaking down the task, setting goals, and practicing stress reduction techniques to tackle the unpleasant bureaucracy of tax filing sooner in the year.
