Nothing is certain but death and taxes? Have you heard this saying?
Let’s talk about taxes, tax season, and changing your mindset when it comes to taxes!
I had to submit my tax return form this past Sunday – so during the weekend I’ve spent some time looking at numbers. Lots of numbers. I am really proud of myself – managed to fill in the tax return form in Czech, even though my Czech level isn’t great – to say the least – especially when it comes to financial lingo 😂.
The bad news?
I need to pay about 4 times more income tax this year compared to my past year.
The good news?
That also means my revenue went up, compared to my previous years. And I am grateful for that!
Still, I know that many people are literally freaking out about the tax season. So, I want to share some of my personal tips and strategies for coping with it! And many of them might be relevant for you even if you are not filling in tax return forms!
My tips on coping with your taxes and the tax season
Tip 1. Prepare for it!
Don’t leave all your receipts, invoices, reports for compiling on the last day!
I set aside a day at the end of each month in which I’m arranging all the paperwork, crunching the numbers, recording everything in my spreadsheets.
This helps me not only with my tax return forms, but also in knowing where I stand with my businesses. If I am still growing or not! So I do recommend you to do this, even though you might not even have to fill in a tax return form (for some this isn’t even an issue, as their employers do it for them!).
Tip 2. Put money aside BEFORE you actually have to pay the taxes.
First option – transfer 5 or 10% of any incoming revenue into a different bank account as soon as you receive that payment! You can start doing this for next tax season, for example.
Second option – if this is too much for you – let’s say your cash-flow isn’t great just yet… You can instead think of a piggy bank! And in a cashless world, there are also options for digital piggy banks. I am using a service called Revolut, for example – it is a phone app that allows money transfers, it comes with a card, optional travel insurance and many other features. One of them i called Vault and this is the one I want to talk about now.
You can easily set up a vault and Revolut will round up any payment you make with your card and will add that difference in your vault. So, let’s say I’m paying 2.95 EUR / USD at a shop somewhere. Revolut takes the extra 5 cents needed to round the number up and puts them into my Vault. Literally, the equivalent of me getting a 5 cents coin and dropping it into my physical piggy bank. I can also set a multiplier – 2x, 4x, 5x, 10x – in which case those 5 cents will be multiplied by 2, 4, 5, 10.
The money in your vault are separate from your main account, so you are not tempted to use them 😁.
Next year, when you have to pay your taxes, you could just empty your vault, use them for paying the taxes, or buying something nice for yourself, should you have more than needed!
Tip 3. Make the whole tax return filling process more enjoyable/fun.
Now, if you really are not a numbers person, like me, think about outsourcing the whole process. Hire somebody to do it for you, while you sit back, relax, and enjoy a cup of coffee. Or use a software to help you do it. Yes, it will cost some money, but then again, so does your wasted time on trying to sort out all those numbers, right?
If that’s not an option or you just like numbers, like me – change your environment so that it gets you more motivated to do it. I’m making small changes, like using a fun colored folder. It brings me joy just by looking at it 😂.
Another thing I’m doing – using colored pens and pencils on my invoices, receipts and so on and so fort. And you guessed it, my spreadsheets are also all colored :D.
And since you know I’m an essential oils fan, I’m also diffusing a blend called Abundance. Not only do I love the smell, but I can also envision Abundance surrounding me while I’m using it.
Oh, and remember that folder I mentioned?
Yeah, it’s bathed in Abundance as well :D.
Bottom line – whatever makes you happier or helps you enjoy the process more – do it! Don’t let the stress and frustration creep in!
Tip 4. Change your mindset regarding taxes!
This is maybe the most important of them all. The bigger picture is key, y’all!
I have friends who are literally frozen when it comes to taxes. They are frustrated. They blame the government for taking their money away. They consume a lot of energy and time thinking about them. But my question is… of what good is this? We’ll still have to pay the taxes, so better buckle up and get done with it. Oh, and while you’re at it, change your focus from the taxes you have to pay to the extra revenue you can generate if you actually stop wasting energy blaming the government and invest it in providing value to your customers, collaborators, employer. Guess what? That might just bring you more income, to offset the taxes you have to pay.
This was a big milestone for me as well – at the beginning of my entrepreneurial journey, I was spending so much time and energy worrying about the fees that PayPal is taking from me… Yes, they are a lot. But then again, I still need PayPal for processing payments – so what good was wasting my energy and time being frustrated about it… and you guessed it – once I changed my focus from the fees to generating more revenue, things totally shifted.
Same thing applies to taxes. Yes, it sucks when the government makes an overnight change and that totally messes up your calculations. No debate here. But then again, are you maybe just using that as an excuse? Did you really give all your best to providing value and cherishing your customers?
So, for the love of everything abundant – if you are using taxes as an excuse for your shortcomings – STOP. Please STOP. Go sniff some Abundance oil, drink your coffee, and double down on creating value! That will take care of your futuretaxes as well!
What’s your take on taxes and tax season? How do you cope with it? Do you have any special tips to share with the rest of us?