Tips for Tax Procrastinators

April 17, 2012, the day to file your taxes, is just around the corner. If you have not started preparing your taxes, you are considered a tax procrastinator. Most tax procrastinators don’t become one intentionally. They simply put off doing their taxes until they realize there is no more time left to wait. These individuals are then scrambling at the last second to submit their information in order to avoid paying late fees and penalties.

Rather than stress out about your last minute task, you can rest assured that you are not alone, and you should use the following tips to ensure that your tax preparation goes smoothly so that you can submit your taxes on time.

Gather your records for filing.

The first thing you need to do before you can prepare and submit your taxes is to get all of your documents and records together. This information includes forms from your employer, such as W2s or 1099s, as well as interest statements, mortgage statements and anything else that has a bearing on the amount of taxes you pay each year. It is also a good idea to have a list of your families social security numbers, as these will be needed to file your taxes.
Find a tax preparation software or company.

If you have a company do your taxes, you need to contact them soon to set up an appointment. Right now, these companies are dealing with other tax procrastinators like yourself, so they will be busy and will need to schedule an appointment for you.

If you would rather do your taxes yourself, you need to purchase a tax preparation software. Since you have already waited this long, using software will allow you to send your taxes in electronically, which will save you from having to send your information in the mail and prove that it was sent before April 17th.

Some tax preparation software does not cost any money. All you have to do is pay a filing fee, and this fee can be taken directly from your projected return, so there is no need to spend money up front.
Be prepared for delays.

This year, the IRS had some issues towards the beginning of the tax season. Because of this, many individuals have experienced a delay in their submission process. The IRS has gotten their act back together, so nobody should be at risk of a delay, but it is still smarter to start your preparation now.
Get it done now to avoid fees.

If you are late to pay your taxes, you will be hit with numerous fees and penalties. This can be a very expensive price to pay for procrastinating.

So instead of sitting on the couch watching TV, get up, get your records together and go visit a tax preparation company or use a tax preparation software. The sooner you start the process, the sooner you’ll be done and you can get back to your TV show. Plus, if you start now, and there’s an issue, you have a few more days to fix the issue before being considered late.

Andrew Malak is a business student at the University of Texas who loves to write in his spare time. To ensure all his work is clear and free of grammatical errors he uses a grammar checker. He cannot wait for graduation as his parents have promised him a Bahamas vacation.

The Supreme Court Decision On Healthcare Will Affect Taxes

The nation waits for the Supreme Court to announce the ruling about health-care. Many wonder how their ruling will change taxes?

Not only does the Supreme Court decide about the Affordable Care Act, but also taxes. How will their judgement change taxes?

The law must include tax cuts and increases. Even if the individual mandate is eliminated, the taxes would go on. Unless the Supreme Court eliminates the entire healthcare bill.

The mandate tax will be the punishment people would owe for not buying insurance. The High Court must decide whether it is considered a penalty or a tax.

There are important ACA tax cuts for small businesses that will help with purchasing insurance for their workers. There was over a million dollars spent on lawyers and fees to challenge the healthcare law by the NFIB.

Is it practical to have the subsidy if the Court overthrows the key elements of the reform? It is a sure thing that the NFIB will agree.

The law contains many tax increases, that includes the excise tax on top-value, employer-sponsored healthcare plans which will start in 2018. There is be a provision that will make it harder for people to itemize medical costs.

There are a couple of other tax increases. The first increase is a .9% Medicare tax for those making above a certain threshold. This money would finance the elder care health system. The other is the 3.8% tax that households who have non-traditional income will have to bear. Some feel this is a surtax and the real purpose is to bankroll part of the cost of the ACA.

The Supreme Court decision may hit upper income families hard. In 2013, the two levies would hike taxes on households making $500,000 to $1 million, their taxes would increase by $4,600. For those making more than a million they would pay $41,000 in taxes.

Even for lower income families, there will be a tax. Married couples making over $250,000 combined, and single taxpayers making $125,000 will face a brand new tax. Households needing to pay these taxes over the next decade are going to double in number, because inflation is not taken into account. It will reach 4.6% from the 2.4% that it is now.

These tax provision should not be forgotten, even if the Supreme Court leaves them untouched. I think we shall hear about them again.

Should You Take Care of Your Own Taxes?

One of the major downsides of being self-employed is the dreaded tax return and the question of whether you should do it yourself or pay an accountant to do them for you.

Your initial thoughts may be to file your own taxes to save paying someone to do them for you, but you should never underestimate the time and effort it takes to complete your tax returns and the consequences if you get it wrong.

To make matters worse the goalposts sometimes move and the rules can change depending on new tax laws or even if there is a change in your personal circumstances.

Who should complete and file a tax return?

Most taxpayers that are in full time employment do not have to complete a tax return as this is taken care of as part of the Pay As You Earn (PAYE) system on your wages or occupational pension.

This means that you will not be issued with a tax return.

However, you will be issued with a tax return if you are

Self employed

  • A company director (though not if for a not-for-profit company)
  • Have income from rent or properties (there is a lower amount that can fall under PAYE)
  • Have another income that is not taxed by PAYE.

If you are unsure whether or not you fall into any of these categories then you should contact the revenue service at www.hmrc.gov.uk.

Tax return deadlines and fines

The filing dates for tax returns are different depending upon whether you return them using paper forms or online.

The deadline for the paper tax returns is October 31 of the following year.
The deadline for online tax returns is January 31 of the following year.

And the bad news is, if you miss these deadlines then there are some strict penalties:

  • £100 penalty – tax return is one day late
  • £10 per day, up to maximum of £900 – three months late
  • The greater of 5% of the tax due or £300 – six months late
  • The greater of a further 5% of the tax due or £300 – 12 months late

And the worst news is that you could be liable for these fines if you don’t owe any tax or even if you are owed money – so make sure you file your tax returns!

Keeping records

The law dictates that you must keep all of the records necessary to fill in and correctly complete a tax return. Incomplete returns are subject to penalty fees and interest charges. To find out about what records you should keep visit www.direct.gov.uk

Estimates and errors

If you are waiting for information you need to fill in your tax return then you may use provisional figures or estimates so that your return isn’t filed late. Use the ‘any other information’ box or white space on an online return to draw attentions to this.

If you make an error on your tax return then this can be put right by calling HMRC on 0845 60 55 999.

Should you take care of your own taxes?

If you fall into one of the groups that need to fill in a tax return then you need to consider whether you can trust yourself to get it right and if it is worth the time and potential stress. If not, then it may be best to employ an accountant to do it for you.

Rob E is an avid financial blogger and freelance writer for www.click4personalfinance.com and loves to share his knowledge on personal financial.

New Jersey Residents Look For Lower Tax Assessments

The Sfarras in Teaneck disputed the tax assessment on their home last year, which helped the value fall by almost 12%. This let them save almost a grand a year in property taxes. Dorthy Monooopli also did something similar, reducing the value on her home by 30k.

These are only a few of the people who are trying to get lower tax assessments due to the falling prices of real estate over the last few years. As the filing date for tax appeals gets closer, many people are trying to file the proper documents.

William Dressel, in charge of of the League of Municipalities, says that that such efforts are lowering the amount of property taxes that a town gets, which might reduce the services citizens get because of lack of funds.

A common strategy is for towns is to do an area wide assessment of real estate, so everything is in line with current market values. This makes it more difficult for homeowners to dispute the value of their homes.

Home prices have fallen about 20% since the housing bubble. However, an appeal is not guaranteed. Towns determine the value by using a ratio that takes into account the current state of the economy.

The city of Teaneck has a current tax ratio of near 104 percent. This means that lower tax assessments are possible, because the assessment is more than the real value. If a home was valued at $100,000, it would only be worth $96,000.

Money Saving Tips For Taxes

If you want money saving, one area you might be considering saving in is taxes. There are many potential reasons you could get a tax break. Therefore, before filing, make sure you look into them. Here are 4 categories that might qualify:

Job search

First of all, if you switched jobs, started a business, or conducted a job search, you could qualify. You can claim the job search expenses, such as making resume copies, placement agency costs and attending seminars for careers. If you had moving costs related to your new job, this could be tax deductible. The tax moves deduction just depends on how far you moved, and how long you spent. To qualify for any of these, the job search expenses must have been at least 2% or more of the gross income for the year.

Home office

A lot of business owners are working from home today. If you use a portion of your house just for business and consistently for business, meet with clients in your house, or have a business portion of the house separate from the main home, you could qualify.

Dependents

If you had a baby, sent someone to a university, or put kids in daycare this year, you could qualify for deductions. Also, you can get deductions for every dependent you have.

Education credits

The American government gives tax credits and deductions to encourage more people to go to college. Therefore, if you, your spouse or your kids attended college this year, it could qualify for a tax credit.

What cannot qualify

The first $2400 you made from unemployment used to be tax free. However, this is no longer the case, as this provision ended as of 2010. This year, you have to pay taxes on all the unemployment benefits you might have gotten.

Conclusion

When it comes to money saving, tax deductions are one of the best ways to save. Just evaluate your situation and see which you qualify for.

Unusual Tax Deductions Can Be Risky

Should you take a risk on tax deductions? My answer would be no. The turbo tax software site says the same thing. I am not one to take such risks. However, others have dared to boldly go where no tax payer has gone before.

One group of accountants in Minnesota decided to take a survey to compile a list of unique and strange tax deductions. It is a good thing their accountant talked them out of claiming such things or else they would get an angry letter from the IRS.

It is amazing what some people try to list as deductions. One handyman in Minnesota though they could take a $25000 deduction for the miles he traveled back and forth to work. Their business revenue is $10000. An accountant in the Minnesota CPA group who gave the surveys had a client with a huge amount of  expenses on  a luxury vehicle. They thought the tax deduction was legal though they resided in another state. One client wanted to list a city official as a dependent because they paid the salary.

Some people think you can claim a spouse. According to the turbo tax website, you can get a deduction for a dependent spouse if you file jointly. You cannot claim former spouses as one person tried to do. It is also  a good idea not to inflate charitable donations. Odd deductions can get you audited by the IRS. The ironic thing is you can claim some strange deductions according to turbo tax.