MoneyMindedMoms: Tax Payments Are Due

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Tax Payments Are Due
Apr 04 2011 08:00 PM | Eva Rosenberg  in Erasing & Managing Your Debt -----
Well my friends, I have good news for you and bad news.

The good news is, that you have three extra days to finish your tax returns – until April 18th. You can thank Abraham Lincoln for signing the Compensated Emancipation Act (more familiarly known as the Emancipation Proclamation) on April 16, 1862. Since holidays that fall on Saturdays are celebrated on the Friday before – the rest of country is relieved from the April 15th deadline.

The bad news is – , if you have a balance due, you will still have to pay your taxes by April 18th. If you are self-employed, or an investor, you will have to pay your estimated tax payments. Folks wanting an IRA for 2010, must fund it by April 18th. All these expenses at once. Whew! Do you have enough money to cover all that?

People who’ve been following Suze Orman’s advice do, of course. You’re well organized and have your money properly managed and planned. Those who are just getting started, well, you’ll need to build up to having all the funds you need at one time.

What if you don’t have all that money right now? What should you do?

Just sigh, despair, and skip some of those payments. OK, so you won’t fund an IRA this year. Perhaps next year. OK, so, you’ll cover last year’s taxes, and try to catch up on this year’s later. Always feeling overwhelmed, like “the hurrieder I go – the behinder I get.”

Or! You can use your money in this order, based on specific deadlines:

  • Fund the IRA – you can’t pay it anytime after April 18th and still get credit for it in 2010.
  • Pay your 2011 estimated tax payment. That gets you current and avoids any new penalties.
  • Put your tax return on extension (use Form 4868) – and you have 6 more months to pay the 2009 taxes. Pay what you can afford now – at least $50 - $100. You’ve already incurred most of your penalties for not paying in 2009. The new penalties are not that much - about 5%, including interest through October 15th.

In the meantime, do something to raise the extra money for 2009 taxes so you don’t have to put it on a credit card or borrow it. Here are some ideas:

  • Get an extra job for a month or two.
  • Have a garage sale – in person or on eBay or somewhere.
  • Sell of the gold you’re not wearing anyway. It’s worth top dollar these days.
  • Have a Tax Sale in your business or website. That’s what all the Internet “millionaires” do. They usually made a bunch of money in the previous year and have no cash when tax time rolls around.

In the meantime, stay on top of this year’s taxes by setting aside at least 25% of your self-employed earnings, or raise your withholding enough to cover your taxes for this year.

Eva Rosenberg, EA is the publisher of , where your tax questions are answered. Eva is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at and other tax courses at


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