If you haven’t filed your 2011 taxes yet, today’s the day. Your completed return and any taxes due must be postmarked or e-filed by midnight tonight to be considered on time by the Internal Revenue Service.
This year’s April 17th due date comes later than normal due to a holiday that was observed in Washington on Monday, but those couple of extras days weren’t enough for many of us to complete our returns. If you need more time, request an extension with IRS form 4868. An extension will give you another six months to complete your return.
The extension gives you more time to gather your documents and complete your tax return, but it does not give you more time to pay any taxes you owe to the IRS. You’ll need to send payment of your estimated taxes owed with your extension request.
Form 4868 is a simple document that will only take a minute or two to fill out, but to complete it you need to know your estimated 2011 taxes as well as your 2010 adjusted gross income. You can obtain this form through the Free File Fillable Forms program at www.irs.gov. Once you fill out the request form, you can print it off and mail it or e-file it directly to the IRS.
If you owe less than $1000, you did well by taking out an interest-free loan from Uncle Sam over the year. But if you underpaid your taxes by more than that, you could face penalties and interest charges. You can either calculate this amount yourself and add it to your tax payment, or you request the IRS figure it out and send you a bill for it.
And while it usually feels better to get a refund than to owe, getting a very large sum at tax time means you gave the Treasury an interest-free loan all year long. And if you’re paying interest on credit cards or auto loans, it just doesn’t make sense to do that. The IRS said that the average refund for tax year 2009 was $3045. If those people had a more accurate tax withholding taken from their paychecks, those paychecks would be $253 more each month. Why let the government hold your money for you when we could all use an extra $250 a month?
It may be time to adjust your withholding if your income tax refund is too large or you owed too much for 2011. You can change your withholding by filling out a new W-2 with your employer any time, for any reason, and as many times as you need to in any given year. Common reasons for making adjustments to tax withholding include: getting married or divorced, having a baby, buying or selling a house, significant change in income, a dependent leaving your care, and starting or ending a business endeavor.
Only two things are certain and taxes is one of them. Take a look at how the whole ordeal goes for you every year and either pat yourself on the back for a job well done or consider fine-tuning your record-keeping strategy to make it go easier for you next year.
