The hands of time keep turning. No matter how badly you want to run from it, April 15th is close.
Now, some of you have responsibly filed your taxes. You might already be wasting your huge tax return.
But, there are some of you who are calling out, “Maranatha”, but yet God patiently waits for his timing.
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How To Get Your Taxes Done Or File An Extension
Tip #1: Set A Date To File Your Taxes – Get it on the Calendar
If you file your own taxes, you need to grab your calendar and mark off an evening or a Saturday. The only way to make something harder to do is to keep delaying the inevitable. At this point, your best bet is getting a tax software that you can complete online (like H& R Block) or getting something that has an immediate download (like Turbo Tax).
Remember if you have a simple tax return you should be able to file federal taxes for free.
Tip #2: Start Organizing All Your Tax Documents
If you haven’t already, gather all tax information into one place. Then start putting all your tax documents into one file. If time allows, be sure that you have everything you need.
Tip #3: File For An Automatic Extension
You can file by using an IRS e-file or by filling a paper form.
To e-file for an extension, just complete Form 4868, Application for Automatic Extension of Time to File US Individual Income Tax Return. To file a paper form, just print up the form and mail it to the IRS.
When you file for an extension, you will get an additional six months to file.
Important: If you think you will owe taxes, you must pay them by the April 15th deadline. Otherwise you will be responsible for interest payments and possibly some other penalties.
Extension of Time to File for Individuals Outside the United States
This is my chance to brag.
If you live outside the US, you get an automatic 2-month extension. This means you have until June 15th to file your income taxes. However, you must still pay any taxes that are due by April 15th.
People who live outside of the US can also file for an extension to get an additional four months to file. As such, if you file for an extension, you will need to file by October 15th, 2010.
Even if you live overseas, you should use the same method for applying for an extension (Form 4868).
What if you don’t have enough money to pay your taxes?
If you owe taxes and you don’t have the money, you need to do two things – and they both might seem very hard.
First, you NEED to find a way to pay the IRS. In this case, you will be better off owing a bank or credit union instead of the IRS. The IRS has a massive amount of power that they like to yield like a deadly sword. You do not want to get on their bad side. Here are some more options if you can’t pay your taxes.
Second, you need to revisit your accounting procedure or see an HR representative to adjust your withholding. You can only owe taxes if you didn’t hold back enough money on income you earned. If you are employed, simply increase your withholding amount so you won’t have the same problem next year. If you are self-employed, automatically deduct the right amount of money from your salary and put it in a separate bank account just for taxes. Tell yourself that if you touch that money, you are stealing from the IRS.
One thing to add about extensions: your best option is to file an extension online. That way you’re guaranteed to get a response from the IRS and can re-file if your request was rejected. If, on the other hand, you choose to send the IRS your request through the mail, you will never hear anything. That means it may never get to the IRS or it could be rejected. That will mean you’re accumulating late filing penalties without even knowing it.
Another thing to think about, after your file taxes this year, is organizing for next year. If you have not already done so, set up a file or files for 2010 taxes. Look at the categories where you had entries this year (income, deductions, small business, etc) and set up a folder for each one. Then, during the year, whenever you have a receipt or document that is tax-related, file it in the appropriate folder. Next year you will be several steps ahead of the game.
I became self-employed in Dec 2007 (not by choice, but it’s been a blessing) and did NOT do this – I just had one folder labeled “Taxes.” It was a huge chore to sort through everything. So I set up individual folders for each category and began using them in 2009. What a difference a year makes! My main task this year was to total up each category.
One of my goals/plans going forward is to set up spreadsheets for each category and every so often enter the items and expenses. That way, next year, the work will (almost) be done.