How eCommerce entrepreneurs can beat tax procrastination
There’s no question that the internet has been a massive boon for businesses everywhere. It’s also been a great equalizer, allowing new minority-owned and woman-owned businesses to be on equal footing with larger or more-established brands. And it’s opened up opportunities to partner with minority and woman-owned businesses and qualify for incentives. But, despite all this opportunity and excitement, there’s the reality of tax time, which can strike fear into even the most enthusiastic eCommerce entrepreneur. While there’s a lot to take in when it comes to tax time, there are also strategies you can employ to beat procrastination.
First, why do we procrastinate on taxes?
You are not alone if you’ve ever waited until the last minute to do your taxes. Fully one-third of Americans filed their taxes on the final days last year alone. Thirteen million people filed for an extension until October, and a big chunk of them waited until the extension deadline to file.
Taxes fall into the classic buckets of things we choose to procrastinate: they can be challenging, they can cause anxiety, and there’s no immediate reward for doing them. It’s not like you get a sticker or even one of those confetti emojis when they’re done. You only get to let go of the stress about doing them. But, as we see by the numbers, that’s not enough to motivate a big chunk of the population. Add in the complexity of itemizing deductions for your eCommerce business and figuring out the answers to complex questions, and it’s no wonder tax procrastination is real.
The bottom line is that working on taxes can be stressful. Research shows that people often don’t want to work on, or don’t finish, tasks they find stressful. But here’s how online sellers can start their taxes and work past procrastination once and for all.
First, confront the stress
Although it’s a common experience, everyone’s reasons for being tense around tax time are slightly different. Taking time to confront yours is the first step in getting motivated to do your business taxes. It’s often helpful to take out a legal pad or a journal and start jotting down the fears that come up. Are you concerned you’ll learn that your business hasn’t been doing as well as you’d hoped? Are you afraid to make a mistake? Are you concerned that you’re going to owe more taxes than you can afford to pay? Whatever the reasons, small or big, rational or irrational, write them all down.
Next, write the worst thing that can happen if these fears are confirmed. What will happen if your business’s numbers don’t look solid? What can you do if you make a mistake on your return? What if the tax bill turns out to be shockingly large? Even if it’s unlikely that any of these things are true, naming the big scary thing lurking out of sight almost always makes it less overwhelming. If your business isn’t doing as well as you’d hoped, knowing the reality can help you craft better marketing campaigns or choose to cut expenses. If you make a mistake, returns can always be amended. Tax entities work out payment plans if you can’t afford your tax bill. Name the fear and understand that everything can be confronted. And, the earlier you face issues, the sooner you work them out.
Next, harness the power of automation
Often, the tasks we put off because they feel overwhelming or boring can be automated. Case in point: itemizing deductions. Charging all or most of your business expenses on one card, then syncing that with software that categorizes expenses can greatly reduce the amount of manual categorization you have to do and cut down on hours of poring over spreadsheets.
You can also automate the payment of taxes. The trick is having enough of a buffer in your account and setting up the quarterly payments, so you don’t have to remind yourself to do it.
|Often, the tasks we put off because they feel overwhelming or boring can be automated.
Do it in manageable chunks
Sure, it’s intimidating to recap an entire year’s eCommerce business expenses and dig up receipts for that business trip you took to a trade show ten months ago. That’s why creating a habit of entering and categorizing expenses regularly will make tax time much less stressful. Choose the cadence that works best for you. If you do a lot of in-person shopping for your business (say, if you sell handcrafted items and you’re regularly going to art festivals to discover new merchandise), you may even want to carve time out of every business day. But most eCommerce entrepreneurs find that once a week is about the right amount of time. But even if you can only get to it once a month, twelve much shorter bouts of organizing expense information is much better than one marathon session the night before your return is due.
One trick procrastination experts often suggest is the “you can do anything for 15 minutes” technique. Rather than tell yourself you’re going to complete your full return, ask yourself what you can accomplish in 15 minutes. You can likely categorize quite a few expenses in that time or open up the website where you plan to do your taxes and put in the basic information. Start early and schedule regular 15-minute chunks so you can chip away at the task. You may find that toward the end, you will pick up steam. But even if you don’t, you can get your taxes done fifteen minutes at a time over weeks or even months.
Know where to find help
There’s often a misconception that getting help on taxes will be expensive and prohibitive. It’s true that the average tax professional may cost more than the online software you’ve been using to file your taxes. But if tax procrastination is causing you anxiety or, worse yet, has made you get hit with penalties, a good accountant may help get you out of the rut and help you beat tax procrastination once and for all.
Avoid missing deadlines or getting late-payment penalties, so stay on top of upcoming tax deadlines. Sign up for a free account with ComplYant for custom calendars and business tax management.