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Tax Return Made Simple Series – Busting Challenge No.2

The following is a sample extract of an unedited draft chapter of our forthcoming book, Tax Return Made Simple which addresses each of the 12 challenges that stop most business owners from doing their tax return and their accounts.

Challenge 2: Believing you can’t do your tax return and/or get your accounts in order.

Solution: Believe that you can.

You may have heard the phrase ‘whether you believe you can or can’t you’re right’ by Henry Ford. Or maybe Louise Hay’s “change your thinking, change your world” or something similar. The concept has got a bit fluffy (in my opinion) over the years but the underlying message is the same – If you think you can’t do something, you will always believe that.

If on the off chance it ever does happen, you will then think it’s a fluke and seek an explanation why it did happen. There is a psychological term used to describe this and it’s called cognitive dissonance, which describes the process when your brain looks for an explanation for the abnormalities between your beliefs and your reality.

For example, perhaps something really good happened to you one day and you wanted to know why. Maybe your favourite sports team won a competition that day, or since this is a business book, maybe you won a great contract. If you believed that these things didn’t normally happen to you, you would have then looked for something else to explain it, to understand why it happened, so you may have then assigned the good luck to a t-shirt or underwear you had on that day or something else equally random, such as a routine.

If you believe that you can’t do your accounts, keep them up to date nor do your tax return then you will always believe that. Anytime you do, you will think it’s a fluke or all down to the lucky shirt.

However, I’m now going to introduce to you another psychological term which explains why the cognitive dissonance is so strong. It’s called confirmation bias which happens when we believe something.

Confirmation bias occurs when we actively look for evidence that supports a belief (which is when believing you can’t do something is further compounded as described above) and we adapt our behaviour, where possible (consciously and unconsciously), to ensure that what happens meets our expectation. This is a very prominent concept in experiments, thus why it’s important scientists must show details of their workings so it can be replicated by others. No-one is exempt from confirmation bias (nor from cognitive dissonance).

If you don’t believe you can do your accounts then any action you do take could unconsciously sabotage it, to ensure your expectations support your belief.

Thus when doing your accounts and being in control of your money, instead of looking for a reason why it was a fluke (cognitive dissonance), I suggest you start looking for evidence to support why it was possible and challenge any belief that says it isn’t (confirmation bias) and get curious about your behaviour.

I want you to start believing ‘maybe you can do this’ and start looking for all the signs that tell you that you can (again to confirm your belief). Experiment and see what happens. But just like a scientist, do it with full awareness of what you’re believing or not believing and assess the evidence objectively. Even ask for a second opinion or two!

I believe you are an intelligent person who is more than capable and that you can add up, even if you do need a calculator or spreadsheet to help you. These are the basics needed to do a tax return, that and knowing what to claim but we’ll cover those in chapter 7-8.

End of preview.

To read more, sign up to receive the FULL preview HERE. Only available until 25th November! By receiving the full preview of Tax Return Made Simple, all I ask in return is feedback by 30th November, and if you would some free advertising, a book review for insertion in the published professional edition.  Then we hope you tell all your business friends about it.

© Helen Monaghan

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