The April 15 income tax filing deadline is next week. Do you know where all your forms, receipts and statements are?
The clock is ticking but there’s still time to act. For some timely tips, MainStreet.com spoke to Bob Meighan, a CPA and vice president of TurboTax (Stock Quote: INTU).
MainStreet: Why do people wait to pay their taxes?
Meighan: Fundamentally, it is human nature to put unpleasant tasks off. And no one will argue that doing taxes are fun.
Many people are comfortable waiting until last minute to file their taxes. Lots of people say, “I can’t do it today,” or “I can just go onto TurboTax on April 14th and do it then.”
Our whole philosophy is to make filing easier for the consumer.
You can do a quick calculation to find out whether or not you’re going to owe money this year and TurboTax can even do those calculations for you.
Why is it important to pay by April 15? Can't I just get an extension and pay later?
You’ve got to remember: You can get an extension to file your taxes, but you can’t get an extension to pay [without incurring a late payment penalty].
Other than paying on time, what are the other most important things to remember when you’re filing your taxes?
There are four things that you have to remember. The first thing is to get organized now. Get your W-2s and your receipts in one place so that you don’t have to spend time searching.
The second is to make your IRA contribution before April 15 in order to claim an IRA deduction on your 2008 return.
Next, you should go online to find out where you can prepare and file your return because that’s going to ensure that you get the biggest refund possible. Naturally, I would suggest that you go to TurboTax.
Lastly, you should file electronically. That way you get your return in eight to 10 days instead of having to wait four to 10 weeks for it.
Millions of Americans have lost their jobs. Is there anything that you can do to get additional money back now?
There are some tax provisions that allow you to save money. If you lost a job last year, you’re going to have job search expenses. That’s a deduction. Did you move [for work]? If so, that’s a deduction. You can get a child care credit if you had to send your child to day care in order to hold a job.
How about the stimulus? Will people have to pay more because they get an extra $400 to $800 a year through the Making Work Pay tax credit ?
The answer is no. The whole concept of the Making Work Pay Credit is to put more money into taxpayers’ pockets right now.
That credit changes the amount your employer would withhold from your paycheck. So, now employers look at the withholding tables and say, “Now I have to withhold less.”
Take-home pay has been increased to reflect that credit, but we’re talking about $400 to $800 per taxpayer. That’s not going to put you into a higher tax bracket.
Are there any benefits for small businesses this year?
They say that small business is the growth engine of America and, with the economy the way it is, there’s tremendous tax breaks. You can write off your start-up expenses and legal fees related to trademarks and copyrights. Moreover, the IRS has liberalized depreciation rules.
The IRS has made these changes in order to get money into consumers’ or small business owners’ pockets quicker and get things moving again.
For more timely tax tips, check out our complete archive of Daily Deductions.