What the Olympics Can Teach Us About Taxes
The Summer Olympics is one of my favorite sporting events to watch. It’s amazing to see four years of anticipation come together for two thrilling weeks of entertainment. From the infrastructure that is built to world-record-breaking performances, there really is nothing like primetime at the Olympics.
As a tax accountant, this year I have viewed the Olympics through a different lens. No doubt I have spent many of the last few nights in awe of history in the making. However, this year, I cannot help but realize that the Olympics parallel … wait for it … taxes! I know, you are probably shaking your head and telling me to leave work at the office, but bear with me as I unpack this.
Four years of Olympic training is like preparing your documents for tax preparation.
It is nearly impossible for an Olympic athlete to train for only a few days leading up to the Games if they expect to be competitive. Likewise, it is nearly impossible for efficient tax preparation by April 15 if you have not kept good track of your records throughout the year. Just as an athlete trains over a long period of time, maintaining accurate records of taxable income, deductions, and credits throughout the year allows for a much smoother April.
As the old adage says, “Eating an elephant is as simple as eating one bite at a time.” Tasks that may seem daunting at first, such as winning 21 gold medals (Michael Phelps), end up being attainable if the hard work is spread out over a long period of time. What are you doing today to help make your tax filing stress-free in the future?
The Olympics is both an individual event and a team event, just like you and your CPA.
Personal motivation is essential to perform on the Olympic stage. Whether someone is trying to make the Olympics for the first time, or setting a personal best, each athlete tries to win for themselves. But what song is played when they are standing on the podium? It is not their personal theme song but rather their country’s national anthem.
The real competition at the Olympics is between nations – the largest teams on Earth. Training can be done alone, but in order to push past your limits and achieve greatness, it helps to have a coach, guiding and motivating you. The same is true with tax filing. While it’s possible to file your taxes on your own, what if you had a team of business and financial advocates coaching you and keeping you on track to maximize the hard work you’ve invested during the year? Hiring a CPA connects you with a team of “coaches” that have one priority – you.
The judges at the Olympics are just like the IRS.
Let’s face it – what seems like an amazing performance to the average viewer can be subpar to an expert. Just as the regular viewer is no expert in diving, swimming, or gymnastics, the majority of tax filers are novices when it comes to tax law. Olympians know that they will be judged by the toughest critics at the Games, and they prepare accordingly.
My favorite is watching synchronized diving. The divers never seem pleased with their performance, as they instantly talk about what they can do better on the next attempt before even getting out of the pool from the previous dive. It is a constant refining process to ensure the best performance possible.
Likewise, the IRS views tax returns in very high detail, reinforcing the importance of ensuring that the prior two points above have been executed to perfection: do the legwork of good record keeping throughout the year and then take advantage of hiring a CPA to maximize your hard work.
Effective tax filing is not a one-week sprint in mid-April – it’s a year-long marathon. So in order to perform well come April, it’s important to start training in May.