The Psychology of Tax Procrastination (And 4 Ways to Overcome It)

Every year, nearly one-third of Americans wait until the last minute to file their taxes.(1) Imagine all those people scrambling to gather receipts, track down their W-2s, and trying to decipher complex deductions. So, why do we procrastinate on something so predictable and potentially costly?

The Procrastination Trap: Present Bias and Avoidance

This isn’t a new concept, of course. Psychologists have long studied why people put off unpleasant but necessary tasks. One of the biggest culprits is present bias. Present bias is a cognitive tendency to prioritize short-term comfort over long-term benefits. Taxes are stressful, tedious, and sometimes financially painful, so we delay dealing with them in favor of more enjoyable activities. The future version of ourselves (“Future You”) will handle it, right? Unfortunately, when Future You arrives, that person is just as overwhelmed as Present You were. Future You is not a big fan of Present You.

Avoidance also plays a big role. Tax forms are complex, and uncertainty about the outcome (“Did I fill everything out correctly? Will I trigger an audit?”) can trigger anxiety. In response, many people delay dealing with their taxes entirely. They treat the task like a monster under the bed: if they don’t look at it, maybe it won’t be there. But just like that monster, the problem doesn’t go away and waiting until the last minute only amplifies the stress.

The Cost of Last-Minute Filing

Procrastinating on taxes doesn’t just increase stress, it can also lead to financial consequences. Rushing through tax forms increases the likelihood of mistakes, overlooked deductions, and even late penalties. There’s also the cognitive overload factor—when we cram tax preparation into a short window, we drain our mental energy, leading to poorer decision-making. Moreover, if we’re relying on someone else to complete our tax returns, we’re sharing the misery when we drop that shoebox of receipts on their desk on April 14th. 

Choosing to file your taxes late can be literally costly. Without filing for an extension, late filing penalties start at 5% of the unpaid balance and can go higher over time.(2)

Psychological Hacks to File Early

If you find yourself in the last-minute tax crunch year after year, here are some psychology-backed strategies to break the cycle:

1. Make It a Game – Set a small reward for yourself once you complete your taxes, like treating yourself to a fancy coffee or a guilt-free Netflix binge. Reward-based motivation can make unpleasant tasks feel more manageable.
2. Use the “Five-Minute Rule” – Commit to working on your taxes for just five minutes. Often, starting is the hardest part, and once you get going, you’re likely to continue.
3. Reframe the Narrative – Instead of seeing taxes as a dreaded chore, think of them as a financial check-up. Reviewing your income, deductions, and expenses gives you valuable insight into your financial habits.
4. Pre-Commit for Next Year – Set a calendar reminder for next January to start gathering documents early. Psychologists have found that pre-commitment (i.e., locking in a future action) reduces procrastination.

Tax Day doesn’t have to be a stress marathon. With a little psychological insight, you can file early, avoid panic, and maybe even feel a sense of accomplishment. Future You will thank you.

In need of filing assistance? Contact the Herbein Tax team today. 

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[1] The Data Point: Almost one-third of taxpayers file at the last minute

[2] Failure to file penalty | Internal Revenue Service