File Like a Champ: ADHD & Taxes

It’s tax time! Are you ready?

If your answer is a loud “NO” – you’re not alone. Tax season seems to be one of those universal experiences that makes everyone grumpy and anxious. The whole system seems especially designed to confound ADHDers: first, keep track of every little expense for 365 days, then slog through pages of confusing and redundant paperwork, all to fork over a check of your hard-earned money – and don’t forget, you’ll get slapped with penalties if you make a mistake. What a nightmare.

But here’s the true secret of tax time: it doesn’t have to be a disaster. In fact, it doesn’t even need to be much of a hassle at all. It sounds crazy, but I swear it’s true. And I’m not just saying that as an ADHD and Financial Coach – the tips below can work for anyone.

Normal ADHD Tax Behavior Straight From the Horse’s Mouth
Before the advice, let’s look at some numbers. The coaching team at Thrive With ADD compiled an incredible survey last year, “ADHD & Taxes,” which asked more than 17,800 people with ADHD about their tax behavior. That is a large sample size! Here are some interesting trends that they noticed:

43% of respondents used an accountant while 32% do their own taxes (possibly with accounting software)
25% of respondents admitted that they are at the post office on April 15 trying to get their papers in at the last minute
36% identify as hardly ever or never filing taxes on time, and 46% of those do not request extensions
27% still had outstanding tax forms from the last 3+ years
Anxiety, forgetfulness, poor organization and a feeling of shame are the top contributors to procrastinating on taxes, in that order
Drawing Some Conclusions
Almost half of ADHDers are acknowledging their issues and enlisting the help of a professional with their taxes. Good for them!

The rest seem stuck in a cycle of misery. They feel panicked and confused. They blow off the forms and the deadlines, and they dread the consequences. They take serious risks by just ignoring their taxes altogether.

Bad tax habits have a negative impact of ADHDers’ moods and self-image. This is standard responsibility for every person in the country, and failing at it breeds intense feelings of shame and inadequacy. This is unnecessary drama!

My $0.02
Hire an accountant. I’ve already mentioned some of the traps that ADHDers can fall into when it comes to their taxes: messiness, distraction episodes when filling out the forms, missing deadlines. Put someone else in charge of all that! Accountants are neat, precise, and punctual. They also aren’t there to wag a finger at you – they don’t care if you aren’t good at this. If you were, they’d be out of a job. They won’t make you feel bad. (If your accountant does, he or she sounds like a jerk – pick another!)

Dial back the shame factor. If it helps, look at that survey data again. So many people are in the same boat! You are not alone.

Stop beating yourself up for past mistakes and choose to move forward. Just because these tax habits are normal doesn’t mean they’re healthy. Get a filing system that makes sense to you and is easy enough to use in your sleep. Ask for help when you need it. Check in with yourself to see if things are working out the way you want them to, and if they’re not, stop and adjust.

The government knows that this is a difficult task, and there are safety nets in place. In Thrive with ADD’s survey, 12% of the respondents didn’t even know what a tax extension was. (If you don’t either, it’s a permission slip to file taxes on October 15, not April 15! Here is this year’s info.) Another great option is to complete your late tax forms retroactively. You can do this for any or all of the last three years. You can also re-do your taxes from those years if you or your accountant realize that you deserved a larger refund than you received the first time.

Read on for some advice from other great ADHD experts.

Grab Those Tax Breaks
There are seven great tips in ADDitude Magazine’s “How to Finance Treatment” but one in particular stands out: educate yourself about your medical tax deduction options.

Typically there are two qualifications for special tax breaks: “If your itemized deductions exceed your standard deduction and your family’s medical expenses total at least 7.5 percent of your adjusted gross income, you qualify. Remember to include your own expenses—for co-pays and contact lenses, as well as for any specialized care—along with your kids’.”

Simply reading through that sentence might make you cringe (an itemized deduction list? ugh!) but this is important. Fulfilling just those two basic qualifications opens up a whole new world of funding and government assistance with expenses like co-pays, specialist care, tutoring, transportation to school, and even registration fees at conferences.

Turn April 15th Into Just Another Day on the Calendar
Psych Central’s “Tax Prep for People with ADHD: What to Do Now” is another good resource. For one thing, they recommend abandoning the April 15 deadline. It becomes a terrible deadline of doom for the mind. Instead, you can make up your own rules and escrow your taxes during the year by dividing them up into a series of mini-deadlines in July, October, January and April. You can also work with the IRS to pay estimated taxes through a quarterly payment option. Make a filing deadline of March so there’s a cushion if something goes wrong.

Another step towards mental and emotional preparation entails making physical accommodations for the chore of tax prep. Clear a table or desk and make that your tax central. Gather up files, boxes and/or large Ziploc bags to keep the papers straight. Set it up so you can come and go and know that everything will be safe where you left it.

They’ve also provided a list of the eleven categories of documents to keep track of (or give to your accountant):

All wage/interest income statements (W-2, 1099s, etc.)
Health care expenses
Charitable contributions
Educational expenses
Energy saver purchases that qualify for tax deductions 6 Interest earned on savings and money market accounts
Financial investment income
Inheritance
Gifts that exceed non-taxable amount
Mortgage interest received (1098)
Declaration of estimated income tax paid (D-40ES)
April 15 will be here before you know it, so put this advice into action today, and start dreaming of how to spend your refund check!