By Dave Ulacia

Tax time is a stressful time for everybody. How is it that every year we commit to being more organized with our taxes, yet every year around the middle of April we go into full-out panic mode? How can we avoid being daunted by the task of taxes before we even begin? The only way to avoid a meltdown is to make sure you are prepared.

Our tax advice will help you approach tax season with two things: the proper tools and the proper attitude. With just a few simple adjustments to your daily life, you will find preparing your taxes doesn’t need to be a nightmare.

In their article “Timely Tax Tips,” Buttoned Up® cofounders Sarah Welch and Alicia Rockmore share simple, sensible techniques for handling tax crunch time, including:

1. Review Last Year’s Return. The best way to start in on this year’s taxes is to get out last year’s return and review it. Look and see what deductions you made, what changes you made in your life that may affect this year’s return, and note if there are any carry-over losses you might have forgotten about.

2. Visit IRS Online. Even the Internal Revenue Service knows how complicated the tax process can get. By visiting the IRS website at irs.gov, you can get clarification on all of your tax questions, learn what tax laws have changed, and, most importantly, see what does and doesn’t qualify as a deduction. (Sorry, as much as they seem like it, cats are not dependents.)

3. File Return Electronically. In 2007, more than 80 million people filed their tax returns electronically. Not only is it faster and easier to fill out, it’s more accurate as well. Plus, if you qualify for a refund, the waiting time for e-filers is half that of paper filers.

4. Can’t Pay? Don’t Panic. A huge source of tax-time stress comes from the realization that you may not be able to pay what you owe come April. Don’t worry; there are options. You can apply for an IRS installment agreement, which lets you break up your payments. There are also various options for charging your balance to a credit card. Visit irs.gov for more information.

5. Made a Mistake? It’s OK. Did you already send in your return, only to discover that you forgot a deduction, or made a few errors on it? Instead of turning yourself in to the proper authorities, simply fill out a 1040x form, which lets you amend your original return up until three years after the original filing date.

6. Make Process a Family Affair. Everyone is involved in taxes, so everyone should be involved in putting them together. Couples should sit down and divide tasks between them, while families with children can get them involved so everyone has understanding of what it takes to run a household.

7. Give Everything a Home. Buy 15 file folders and label them for each of the critical tax categories:

• Bank Statements
• Investments
• Charitable Donations
• Work Expenses
• Other Income
• Other Deductions
• Retirement
• House Bills (mortgage, property tax)
• Medical/Insurance
• Last Year’s Return
• Credit Card Statements
• Other Expenses
• Work Compensation
• Dependents

The final folder should be called YUNK. “YUNK” stands for ‘You Never Know’ and is for everything that you think might be useful but are not sure about. File it here now and ask your tax specialist about it later. Use these folders to organize your receipts and statements that you have collected over the past year. That way you will know where to look when you’re itemizing deductions.

8. Annotate Tax-Related Items with a Star. Before you put something in one of your files, get out a pen, and put a star next to items that have tax implications. If you don’t have a tax-related item on your statements—throw them out!

9. Double-Check Everything. It may sound obvious, but by double-checking your return, from deductions, to social security numbers, to signatures, you’ll save yourself lots of time and trouble later.

10. Learn For Next Year. OK, one more year of taxes is done, and now it’s time to relax. But before you kick up your legs, remember what you wished you’d done better, and start creating a routine that can help you next year. Use the 15-folder filing system year-round to keep track of everything from bank statement to investments to donations.

FranklinCovey has a complete line of unique file folders and organizational tools that will help remove most of the stress from the most stressful time of the year. And, with products like receipt.catcher and Tax.filer Kit from our partners at Buttoned Up®, even if doing this year’s taxes was a little chaotic, they’ll help you make the best of it with smart, practical advice.

February 26:

"You can be anything you want to be, do anything you set out to accomplish if you hold to that desire with singleness of purpose."-William Adams

February 26:

If you’re working on a tight deadline, simply escape. Find a place away from others—the cafeteria, a conference room—where people can’t track you down for less significant matters. Or close your office door if you can. It’s okay to take time to focus exclusively on one thing when you need to.

February 25:

Do you subscribe to RSS feeds? Try dividing them into two lists—the ones that help boost your productivity and the ones that reduce your productivity. Feeds that you read for enjoyment should be reserved for relaxation, not when you’re trying to get things done. Consider unsubscribing from some of the feeds in the second list. You probably won’t even miss them.