“Real World” Personal Strategy Blog

Shakopee Accountant Discusses “Freedom From Taxes”

It’s the final week of tax season, and our office here in Shakopee, MN is hopping!

Which isn’t to say that I don’t have the time to step away for a moment and write to you, my friend (if you have all your papers in, and are waiting for our completion — fear not! My team is hard at work, as I type…).

This is often our busiest week of the year
(so please be understanding), but it’s also the week when we receive, with clockwork regularity, many questions about extensions.

So, I’ll be clearing that up this week, but before I do so, a few quick unrelated points:

1) Next Tuesday, April 17th is the filing deadline, but it’s ALSO (by actual coincidence) “Tax Freedom Day”. This is the date pegged by the Tax Foundation as the date when you’ve finally worked to pay off your taxes. The rest of the year is “take home” pay. :(

2) Don’t forget that April 17th is also the deadline to contribute to IRA’s and HSA’s in order to have them count on this year’s (2011) taxes.

And, onto this week’s Note on Extensions…

Your Shakopee, MN Tax Professional Tells The Truth About Extensions
Let’s clear some things up with some facts about getting an “extension”.

As you know, Tuesday April 17th is the filing deadline for a federal tax return.  If you need more time to get your paperwork complete, you need to file (or have us file on your behalf) Form 4868 (Automatic Extension of Time to File) with the IRS by the end of the day on the 17th.  This gives you an automatic six-month (until October 17, 2012) extension of time to file.

Here’s the deal: An “Extension of Time to File” is not an “Extension of Time to Pay”, unfortunately — except for certain cases (more in a moment). In normal circumstances, the Extension simply gives you an automatic six months of additional time to get your paperwork together and file that return.  But, if you owe more than what you paid with your estimate, you’ll be accumulating penalties and interest on the difference–so PLEASE don’t take the entire six months to do this!

The exception to this rule is for:
1) Wage earners who have been unemployed at least thirty consecutive days during 2011 or in 2012 up to this year’s April 17 tax deadline; or
2) Self-employed individuals who experienced a 25 percent or greater reduction in business income in 2011 due to the economy.

So, if that’s you — let us know! We’ll get you payment relief.

For the rest of you, when filing your “Extension of Time to File”, you’ll need to estimate what you think you owe to the IRS.  This should not be pulling numbers out of thin air (or other various body parts)!  You’ll still need to go through your receipts and tax documents and get them “somewhat” organized.

From here, you can estimate both your income and your expenses, and then approximate what you owe Uncle Sam.  Keep in mind that this is an ESTIMATE.  And, you’ll have to pay what you estimate you owe at the time we file for the extension.

You can do this all electronically through our office, you can mail in the form WITH estimated payment (must be postmarked by the 17th), or you can call a specialized provider and pay by credit card. We can provide you with the appropriate number to call.

And it’s NOT TOO LATE! See below, and come by right away!

To more of your money in your wallet!
+++++++++++++++++
“PROCRASTINATORS ONLY” Special Gift Certificate
$23 Towards Any Tax Service
“Yes, I Have Procrastinated Filing My Taxes This Year … But I Still Want to Protect Myself from All the New Tax Laws and Get MORE Money Back from Uncle Sam with A Peace-Of-Mind Guarantee that’ll Keep Me Sleeping like a Baby when My Taxes are Filed with the IRS!”
Deadline April 17th
Not valid with any other offer
+++++++++++++++++

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