This week in the tax office inflation is adding a huge amount to our cost of living. There are not many ways to reduce your overall tax bill. Pushing more money into a retirement account, yes, but those have limits and sometimes fees, and the truth is you probably need that money. Donating, also with limits as well as requirements, both are enough to make it difficult to do. The real problem is you are not getting a dollar for dollar trade on your money when you donate. I’m not just talking about Goodwill. Even if you qualify to donate you are only getting something like a quarter on the dollar. What I’m saying is when you donate that amount doesn’t just come off of your income. It’s only a percentage. A small business could help but it cost money and more importantly time. The truth is you can’t get away from taxes. The best policy is to be informed so you can make the best financial decisions for you and possibly your family.
These are important dates to remember. For Individuals (just a quick fyi: this means family too, individual is as opposed to a business return) April 15 of every year is considered the Last filing date. Generally you can think of February 1 of every year as the First filing date. These dates aren’t set in stone anymore. We have added holidays, and if there is a pandemic, (who would’ve thought, huh?) and now that the IRS (Internal Revenue Service) does almost all tax return filings electronically, the start date is when they are ready for that influx of electronic information. So the beginning and ending dates have changes sometimes. That’s why it’s a good rule of thumb to use February 1 as the start and always April as the final day to file your individual tax return. October 15 is the last day to file your individual tax return if you filed an extension. Extensions have to be filed by April 15 as well. An extension is an extension to file not to pay! This means you should only file an extension if you know you get a refund. You can file an extension if you know that you will owe but you have to make a good faith payment with the extension in the amount you think you will owe. Here is a rod bit; if you know you owe every year you should file your taxes on the first day so you have time to gather the money.
For Corporations (this is not a side business, this is a separate entity that has filed titles of incorporation) the last filing date is March 15 and the last day to file with an extension is September 15. These dates won’t apply to most individuals. Just knowing these dates and having them set in stone in your mind will relieve some of the stress with taxes. These dates were common knowledge, but somehow they have become unknown in our younger developing society. Let’s take control and get to know our own tax returns so we can make the best decisions for ourselves and our families.