This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Three Steps to Avoid a Tax Disaster

CHICAGO ( TheStreet) -- As the clock ticks down to April 15, do you feel your blood pressure rising? Does your desk look like a natural disaster as you try desperately to get your receipts and financial statements in order? Then you may be need of some serious tax-season emergency care.

The good news: It's not too late to take control. Starting today, there are three steps you can take to salvage this year's taxes.

Step 1: Buy yourself more time: Sure, you could procrastinate until the last minute, pull an all-nighter and then find a post office open late on April 15. But do you really want to complete such critical paperwork under enormous time pressure? Being tired and cranky only increases the likelihood that you'll make errors on your return -- errors that might cost you money down the road.

Instead, request an extension by filing form 4868 with the IRS. It couldn't be easier: All you have to do is fill out a half-page document, and you'll get until Oct. 15 to complete your full return.

Although the form asks you to make an estimated tax payment, you don't have to include any money if you don't want to. However, interest will start accruing on your unpaid taxes from April 15 on. You'll also be charged a late payment penalty of ½ of 1% of your total tax bill for every month it remains unpaid.

If you include an estimated payment with Form 4868, that amount will be reconciled with your completed return, which means you might get some money back or have to pay a little more.

The other reason to file for an extension? It gives you more time to consult with tax pros who don't have time to meet with you now, since they're swamped with other clients. Which brings us to ...

Step 2: Get professional help: If you have complicated tax issues that you're not sure how to resolve, head to one of the Taxpayer Assistance Centers run by the IRS. The agents there can grant extensions, guide you through the correct forms and work out payment plans if you can't pay your tax bill in full.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
INTU $101.60 0.37%
HRB $31.90 -1.12%
AAPL $132.65 1.82%
FB $81.91 0.47%
GOOG $555.37 -1.71%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs