ICBA Blog

Tax Time Rescue

We’ve got the solutions to keep stress at bay while you wrangle forms and crunch numbers

For salaried workers expecting a refund, maybe tax time is worthy of celebration, but for many independent contractors, it can be a source of dread. Organizing 1099-MISC forms, adding up expenses, wading through rules about deductions, or anticipating a hefty tax bill can all induce stress and anxiety. We’ve compiled ideas for tackling file time with a sense of calm.

Get organized first
Even the amateur chef will tell you that before you start cooking you want to have mise en place. That’s the fancy French phrase for “everything in its place,” meaning you want to gather and prep all the ingredients. Whether you’re enlisting a CPA or filing solo through an online software system, the first step is to assemble your tax-file pile. Corral all of the necessary 1099-MISC or W-2 forms, compile your deductible expenses, and consider anything that’s changed from the previous year in terms of your filing status. The more organized you are at the outset, the smoother the filing process will go.

Use built-in features to get the job done
That organizational step can feel like an insurmountable hurdle. But you have tools at your fingertips to help.

If you send invoices, hopefully you’ve been using a system like FreshBooks,Harvest, or QuickBooksto do the work for you. But even if you don’t have a need for invoicing services, these platforms can help you keep track of income and categorize deductible expenses. If you haven’t used small business accounting software like this before, now is a good time to start. The features on these platforms are easy to use and can help you get organized fast. They’ll save you time during visits with your tax pro or while working through the tax interview on an online filing service.

If you use a credit or debit card to pay business expenses throughout the year, your bank likely has an online portal where you can export a categorized, year-end expenditure sheet. You may have to do some editing, but a sheet like this is a great place to start if you’re not sure about what you spent on your business or if your receipt stash is a mess. Talk to your accountant to find out what you can deduct.

If you’ve incurred medical or dental expenses, you may be able to deduct them, depending on if they exceed a certain percentage of your income. A great way to tally medical fees fast is to log in to your health insurance portal/s and export a spreadsheet of out-of-pocket expenses. Then ask your pharmacist for a printout of any purchased prescriptions under your account.

Be mindful of next year
Your ultimate goal might be just to survive this year’s filing process. But one of the best things you can do now is to think about next year. As you delve into the prep-and-file process, put in place organizational procedures that will make future filings breeze. Maybe you need to incorporate apps or online platformsto support your indie contractor bookkeeping. Or maybe you need a referral to an accountant who specializes in tax prep for gig workers. Ease the process each year by getting more knowledgeable and efficient.

Don’t panic about your payment
One of the biggest stressors of tax season is, of course, the tax bill. If the final tally on what you owe is higher than you expected, step back and take a look at your options. You must still file your taxes so that you don’t incur a penalty. The IRS recommends paying what you can by the filing deadline, and if you can’t pay the amount in full, apply for a payment plan.

Be kind to yourself
If you’re feeling overwhelmed, take a break from the numbers and forms. Go for a walk, hit up a yoga class, play with the kids, or do whatever it is that might help you reclaim a calmer state of mind. Never hesitate to reach out to a tax professional who can help take the fear and fret out of filing.

This article is for informational purposes only and is not meant as a substitute for the personalized advice of a tax professional.