Minerva News

A Challenge of Olympic Proportions
February 25th, 2014
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Here’s where I’ll be talking taxes (and Olympics?) on March 8.

‘Tis the Olympic season, and along with the breathtaking displays of athleticism, grace, humility, and pride comes an unforeseen consequence: Amateur injuries.

Many of us casual skiers watch the downhill competitions with false confidence. We could do that, we think, just not as fast. It would take me hours to complete any of the downhill courses the Olympians conquer in minutes. But as a casual amateur, I’d meander around the course, stop to take pictures, pause for refreshments at the mid-mountain café, and reward myself at the bottom with a dip in the hot tub.

The experts make us forget we’re watching incredibly complex, difficult courses tamed by experience and sheer skill. We feel like we’re watching bunny slopes.

This phenomenon isn’t limited to the Olympics. I suspect golf courses are overbooked following the Masters, and I’ve found myself on more than one tennis court during Wimbledon.

These events make cocktail party liars out of all of us. I play a little tennis, I find myself saying, even knowing that “a little” is limited to once a year, and it is an incredibly painful experience.

I love to ski.

Of course I play golf.

We rely on the frame of reference current events set for our listeners, while casually omitting details that clarify our own limitations. The details – the daily drudgery of practices, coaching, setbacks, and patience – are less suited for cocktail party chatter.

But those details and the lessons they impart are what we – overzealous amateurs – can actually translate into actions that improve our current state, whether we’re talking about ice skating, downhill skiing, or even our taxes.

After all, it isn’t only golf that makes us liars (or exaggerators of the truth), as Will Rogers famously quipped. Income taxes do too.

So with that in mind, here are five tips for tax season inspired by Olympic athletes.

Practice year round.

Unlike my approach to tennis, which involves an annual outing to a local tennis court after watching the Wimbledon pros, experts practice their craft year round. They develop supporting habits to incorporate into their daily existences. They eat well, they lift weights, and they get enough rest.

The tax equivalent of “practice year round” is to stay organized and keep complete records. It doesn’t matter what record-keeping system you choose. The IRS says you may use “any system suited to your business that clearly shows your income and expenses.” But you need to choose one.

Perhaps you use a software system that reconciles income and expenses with your bank account monthly; perhaps you us a manual system in a database tool (like Excel); perhaps you hire a bookkeeper to help you stay organized and meet with him weekly. Knowing your own style and preferences for staying organized and keeping records will help you develop healthy tax (and business) habits to incorporate year round.

And those habits shine through when it really counts, whether on Wimbledon’s Centre Court or in preparing your annual income tax return.

Find good coaches.

Most of us don’t know everything there is to know about our craft, whether it is ice-skating, painting, or preparing taxes. We’d like to stay informed; we try our best. But our energy and resources are necessarily divided between practicing our craft and managing our craft.

Thus we surround ourselves with experts: Coaches, guides, mentors, board members, instructors, and sometimes all of the above. Trends change, laws change, regulations change, and coaches help us keep up with and navigate those changes.

Coaches help us with the administrative and regulatory aspects of our craft, thus enabling us to devote more time to the practicing of our craft. Recognizing that we need support and employing that support to our best advantage is a sure way to build a solid (business) foundation for our (creative) pursuits.

Take your time.

Patience is a virtue, but it isn’t one most of us employ very well. We tend to set high expectations for ourselves, occasionally forgetting that high expectations may not always be met immediately. Sometimes achieving those high expectations takes time.

And patience.

We watch Olympians at the height of their sport’s excellence in awe; we observe our peers completing their tax obligations in early February as we plan to finalize ours in mid-April; and we see our colleagues’ successes, occasionally with a twinge of envy.

And as we observe those successes, we often fail to recall the number of practice runs an Olympian completes before reaching excellence. We notice a complete tax return, but not necessarily the hours and hours spent preparing it, researching one deduction or another, and compiling records.

In short, we fail to take time to reflect upon the whole journey, not simply the finish line.

Adjusting our expectations – not for the end result, but for the time it takes to get there – employs patience (and a dose of realism) to its best advantage.

Know your limits.

The Winterbourne Hospital in Dorchester issued a warning after survey results indicated 70% of orthopedic surgeons and physiotherapists (the ones that fix those injured knees, hips, and ankles) saw an increase in injuries in the winter months. One surgeon added that he “had no doubt that amateur sportsmen and women will venture to the slopes and the ice rinks this winter having been inspired or motivated by the heroes of the snow and ice.”

Such human nature is wonderful for the business of joint repair, but less wonderful for those needing the repairs in the first place. Similarly, overzealous self-preparers of tax returns (especially those that rely on hearsay advice proffered by someone’s friend’s cousin who is also an artist) may fail to recognize the limits of their own knowledge and experience. The limits, say, faced by an amateur rather than an expert.

There’s nothing wrong with these limits, except of course if we fail to spot them. But by practicing good habits year round, surrounding ourselves with coaches, a support team, and experts, and employing a healthy dose of patience with our limitations, we are less likely to end up in a hospital.

Or in the middle of a tax audit.

Treasure your victories.

I love listening to Olympians share the pride they feel in performing to the best of their abilities, rather than simply relying on the pride felt by a medal: the physical acknowledgement of those abilities. One source of pride comes from within; the other is often beyond our control.

Victories come in all shapes and sizes, in all shades of metallic hues. Completing our taxes is a victory. Learning something new about a deduction is a victory. Developing a system to practice healthy financial habits year round is a victory. Recognizing our shortcomings (like, perhaps, failing to update that fantastic system each month) and finding our way back to a healthy path (by, perhaps, devoting one day a month to the arduous task of income and expense tracking) is a victory.

We should celebrate them all. They all took practice, coaching, and patience, and by recognizing the value in all of those victories, we’ll be less likely to fall into the trap of exaggerating our victories so eloquently summarized by Will Rogers:

“Income tax has made more liars out of the American people than golf.”

Or, dare I paraphrase, the Olympics.

A version of this was originally used by the City of Kettering to promote my upcoming workshop, Taxes for Entrepreneurial Artists. Won’t you join us on March 8 for the session?

Posted in: Events & Media, Numbers Nonsense, Speaking & Outreach

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