It’s April already. Are your taxes done? If not, here are some stress-relieving ideas:
Don’t Procrastinate Anymore – Resist the temptation to put off your taxes until the very last minute. Our office needs time to prepare your return, and we may need to request certain documents from you, which will take additional time.
Don’t Panic If You Can’t Pay – If you can’t immediately pay the taxes you owe, consider some alternatives. You can apply for an IRS installment agreement, suggesting your own monthly payment amount and due date, and getting a reduced late-payment penalty rate. You also have various options for charging your balance on a credit card. There is no IRS fee for credit card payments, but the processing companies charge a convenience fee. Electronic filers with a balance due can file early and authorize the government’s financial agent to take the money directly from their checking or savings account on the April due date, with no fee.
Request an Extension of Time to File – But Pay on Time – If the clock runs out, you can get an automatic six-month extension, bringing the filing date to October 17, 2011. The extension itself does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late-payment penalty if you have not paid at least 90 percent of your total tax by that date. Call us for a variety of easy ways to apply for an extension.
Review Your Retirement Plans
How much have you accumulated so far? How much do you need to retire comfortably at the desired date? Professional advice may be helpful in determining how much you should be saving and what the best investment vehicles are.
Inventory Your Non-Financial Assets
Perform an inventory of your non-financial assets (e.g., home, furniture, cars, personal belongings). Compare this inventory to your property insurance coverage. Is your insurance adequate for your assets? You may need a rider to your policy for certain items such as jewelry. If some assets are no longer in use, consider selling them or donating them to charity. You may be entitled to a deduction based upon the fair market value of the assets.
Review Budget vs. Actuals
Compare March income and expenditures with your budget. Make adjustments as appropriate to your April expenditures. Make sure you have invested your planned savings amount for March.
Schedule Estimated Tax Payments
Add the estimated tax payments for the year to your calendar so you don’t overlook them later. You might want to attach the payment vouchers to your calendar with a paperclip.
Review Retirement Contributions
Review planned contributions for IRAs, SIMPLE Plans, SEPs, and Keoghs for the preceding tax year. Professional advice should be sought to help you determine the maximum amounts deductible, and whether postponing return filing for the preceding year will help determine the amount and timing of the contribution.
Laura is president and owner of 10 Key Solutions: Tax and Accounting Services. She has served in both the public and private sectors of accounting for over 25 years. Laura is an experienced and dedicated Accountant and Tax Preparer, with an attention for detail. Visit her blog for tax tips: http://www.10keysolutions.com/wordpress/.