profitable

Question from a reader:”Can an extension delay my tax liability?”

My answer is no.  You need to file with your extension (which by the way is Form 4868 (PDF available on the irs website ), Application For Automatic Extension of Time To File U.S. Individual Tax Return) your estimated taxes that you owe or at least pay part of the amount that is due.

It isn’t a free pass and a lot of people get confused over that fact.  You still can have time to finish preparing your return but if the IRS is expecting to see some money, they are expecting to see it (or a decent piece of it) on or before April 15.  You can contact them directly and work out any details for payment plans, etc.  The IRS is explicit on their website that you need to pay any money due with your extension.  More information can also be found on the IRS website in publication 301.

A lot of people  file the extension and think by under-reporting their taxes that it will somehow help them when the file later on.  That doesn’t fly with the IRS and if you think you are going to owe it is best that you don’t cut corners and estimate something as close as you can to what your final tax liability might be and pay something. 

For the few people who I have talked to who haven’t filed their LLCs, you are late.  Hurry up and get your filings completed please.

For the rest of us who have filed all our returns, ahhh, sweet relief and delight.  The tax season is over (for this year) and we should all be saving our money and planning for next year.  Hopefully the Federal government can take some of this tax cash they are getting and get more jobs going in the United States, right?

I hope that everybody in California is getting their refunds, as of this post I still haven’t received mine so don’t fret people.  I think that the FTB is just swamped.

Have a great day everybody and I hope all of you have your taxes complete or are almost done!

April 15 2009

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale.   Have you read my book, “Bad Tax Idea, Good Tax Idea“?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!  Tax planning should be done year round and not just two weeks into January or later. 

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Kim Isaac Greenblatt

Filing An Extension Still Means You Gotta Pay Your Taxes

Question from a reader:”What can I do for getting a bigger refund next year?”

My answer is plan for it now with your tax professional.  One of the things that I do as a tax professional is give tax planning advice as well as managing expectations here at tax time. 

If  a client comes in who made hundreds of thousands of dollars and hasn’t paid anything in taxes, it is incumbant on me to say something like , “I can tell you now that it looks like you will be owing some money in taxes.”

Generally, especially at this time of the year, I would be responded to with a nodding of the head followed by the client stating, “I know.”

That is a gross example and the harder more subtle ones might be in the case of your return where you had enough withheld but for whatever reason (maybe not enough deductions, maybe not enough taken out in taxes or maybe your previous tax pro overlooked something important) you aren’t getting the money back that you thought you would.

Have your tax professional sit down with you and go over thoroughly what is going on financially in your life.  Plan now by taking additional money in withholding (if you can afford and stomach it) and you can possibly see a tax refund coming back to you next year.

The inverse holds true for people who run their own business (or whatever situation they are in) and would prefer having their tax liability zero or as close to zero as possibility without the IRS hanging onto their money for the full year in the form of an interest free loan.  As a tax pro, I would work the numbers to see based on projections of income what kind of quarterly tax payments should be made to avoid penalties but still keep the amounts in line with what the client is looking for.  Your tax pro should work with you and do the same thing.

Hope that helps and hope you and all my readers are having a good 2009.

April 12 2009 Mid Day

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale.   Have you read my book, “Bad Tax Idea, Good Tax Idea“?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Kim Isaac Greenblatt

Managing Expectations At Tax Time

Here are the top ten questions you shouldn’t be asking me, Kim Isaac Greenblatt,  this time of the year. Remember, the April 15 2009 deadline is right around the corner.  Please take it in the spirit of humor and it doesn’t apply to my clients:

10.  Can I hold off and see you on the 15th?  I have Easter/Passover/Pagan services to go to!

My answer is no, generally on the 15th I am swamped.  If you want to try your luck, sure, but I can’t promise you that I or any other preparer I know will be available.  We are booking up fast and the last minute choice times are booked already like Las Vegas vacation dates at Christmas and New Year’s time.

9.   How come I am owing so much more than last year?

My answer is I can give you an overview and point out what has changed and what hasn’t.  I can show you the specifics and refer you back to advice I gave you last year.  If you took my advice and still owe, we can see what has changed differently and respond to it.  If you didn’t heed my advice, there is nothing I can do and that is probably why you owe more than last year.

It may be the person who did your return last year (who wasn’t me) didn’t do a thorough job in planning with you.  We can address that now for next year if you’d like but we may not be able to do anything about 2008.

If you can come in earlier in the season next year, we can take a financial pulse for next year and we can also plan now for any mitigating circumstances in your life or business.

8.   Why did your prices jump so high?  All I had differently were some stock transactions.

My answer is that they really didn’t, in your particular case, your return has gotten more complex because of all the stock transactions that you have that you didn’t have last year.

7.  How come I owe money?  I started my own business and I should be getting money back.

My answer is that you probably didn’t take into account both sides of social security and half of self-employment tax.  You probably didn’t make any quarterly tax payments either.

6.   How come you aren’t deducting (blah blah blah) that my previous accountant did?  Don’t you know what you are doing?

My answer is that blah blah blah was an illegal deduction.  He or she isn’t doing you a favor by doing something that is illegal.  Yes, I know what I am doing, that is why I am not deducting blah blah blah so you won’t have problems if you are audited.

5.   How come I can’t take my auto expenses and mileage?  It isn’t fair.

My answer is that I can’t control an act of Congress.  Tax law lets you take one or the other.  Please write your congressional representative for more information.

4.    Where is my tax stimulus for this year?

My answer is here.  The stimulus deal for this year is explained there.

3.     How come you aren’t doing my kid’s return for free?

My answer is that I would have until you showed me that your kid received 1000 stock trades, had rental income, three W-2s and is in a limited partnership with Donald Trump.  My time is worth something and frankly, had you come forward with the information up front I wouldn’t be grousing about it and probably would have made the charge nominal.

2.     How come you don’t have sympathy for me?  I lost my job!  Can’t you do my return for free?

My answer is that the Federal government and respective state governments have websites set up for that.  Please go there, download and work the forms and you will be able to do the return for free.  Having me help you makes me preparer of record and if you are putting me on the hook for being the tax preparer, you need to pay me for my time and services.  I see that you use to be a CEO, did you work for free all those years?

and one of my favorite (or least favorite questions)-

1.    Why should I pay you?  All you are doing is data entry and I can do that at home.

My answer is you are wrong on both counts.  First, I understand what I am keying into the software.   I can do the same thing with pencil and the paper forms.  Can you?   Thought not.  I am recertified each year in tax preparation in being current with tax laws.  I also teach tax preparation and have written books on taxes and business.  Have you done any or some of that?  Didn’t think so.

Second, you couldn’t do it at home.  If you could, you wouldn’t be here trying to demean me or yourself by asking such silly questions!  Dude, it is the end of the tax season and we all are tired and want to be treated with respect.

Since none of my readers are abusive like that, we all can enjoy a good laugh at their expense!

April 12 2009

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale.   Have you read my book, “Bad Tax Idea, Good Tax Idea“?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Kim Isaac Greenblatt

Top Ten Tax Questions You Shouldn’t Be Asking Me

How am I spending this Saturday afternoon?  Running around like a madman, thanks for asking.  I am trying to complete the tax returns of the last minute people who are coming in and trying to beat the deadline and generally they all have some kind of issues or concerns.

People who are usually simple tax return people (maybe one or two W-2s and some interest statements) come in early in the season and file to get a tax refund.

People who run their own business or have not had enough taxes withheld or paid generally come in at the last minute.  Some are more organized than others and some are complicated.

While I try to be understanding with an open heart and hand to help, I get tired of people who are making hundreds of thousands of dollars and are coming in at the last minute, having me do my best to legally limit their tax liability and then want to haggle the price for doing a tax return.  For my regular clients that is not a problem.  For total strangers who walk in the last few days of the season and expect me to drop everything for 2-6 hours of work they need to think twice.

I do pre-emptive strikes by pointing out that if they are doing a complex return that they will have to pay x number of dollars for it.  If they balk and walk, we part as friends.  There is always somebody else who is coming in or calling in need of having his or her taxes completed so I don’t worry.

Like a lot of other tax pros, sometimes I really empathize with people who may have lost their jobs and I will do what I can to help them and cut them a break.  If they are trying to pull a fast one or trying to wheel and deal I just thank them and tell them that I am not their preparer and perhaps they would be comfortable with somebody else.

Also, for anybody coming in late with an export from TurboTax or Tax Cut – just shut up and pay for the return.  You obviously didn’t understand what you were trying to do and as glad as tax professionals are for your business, we understand that you probably won’t be back next year unless you continually mess up the return and get audited.  If you realize that some tax returns are complicated and each year the law changes, just bite the bullet and come in.  Please don’t try and trump us by showing how smart you are.  If you were so smart you would have completed and filed your return in February or March.

Personally, if you don’t have a simple return and have anything more than a 1040, Schedule A, some interest, some W-2s and a single state return, you either better be prepared for a lot of research at your end or just go ahead, make friends with your tax professional and pay him or her each year.

Also, generally at this time of the year my distaste for people who devalue my time and services is probably higher than theirs.  For people who want me to be treated like dirt or software, how do you like it when your company lays you off or cuts your pay and devalues you? 

As you can tell from the tone of this entry, today is a busy, tiring  and weird day!

To all my clients and people coming in to see me (as well as my loyal readers):

Thank you for your business and I hope you all get refunds or have low tax bills!  If not, we need to talk and plan more!!!

April 11 2009 Mid Day

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale.   Have you read my book, “Bad Tax Idea, Good Tax Idea“?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Kim Isaac Greenblatt

Day In the Life of a Tax Pro Last Minute Filing

Question from a reader:”Okay, I have e-filed and now I just sit tight and get my refund, Kim.  What else should I know?  How do I get my refund faster?”

My answer is to take the time you have now and start planning for tax moves and business issues for next year.  Since you have your taxes complete and the information in front of you or in your laptop or printed out (which you should print out anyways and store safely for three years by the way), you should see where you are at in terms of finances and taxes for 2009.

For some of us that may be moot if we are out of work and struggling for making a living or finding a gig.  There is still a good reason to track any income that gets made so that you can allocate what you need to for your Federal and any respective State government payments.

If you are in college, remember to start saving or continue saving your tax documents and costs for going to school.  The new tax credits that are coming in place including one or two that are refundable and that means that you can actually get extra money back at tax time.

Planning on any life style changes?  Pick up a copy of my book, “Bad Tax Idea, Good Tax Idea” for some suggestions that are timeless  and start budgeting for them now.  If it means you may need to revisit your Human Resources department or whoever handles your payroll and see what kind of withholding you are getting taken out for 2009, that is cool.  It is better to start making the changes while we are still early in the year rather than later on when you may not have the money to pay your taxes.

If any kids are leaving home to go off to college and they are filing their own taxes remember that you will be losing their deductions and exemptions.  You should plan accordingly to protect yourself in the clinches. 

I find it funny that the major web services are running their tax information now, when it is really pretty late in the game and a lot of things can’t be changed.  Long time and newly minted readers of my blog are forearmed and are ready for doing their taxes now and on an ongoing basis.  Ask your preparer (or me) any questions early on so you can have a handle on any major issues (like cashing out a 401K or IRA) and insuring that there is enough money withheld on the taxes.

For any other longer pressing questions or issues with estates, multi-state issues etc check with the respective state taxing agencies (link is on my site for all of them), check with your tax pro or drop me a line.  I will be happy to work with you and if you want, do your taxes for you next year.  This year I am swamped and burnt out.

As for getting your refund faster, you need to bear in mind that after you have filed you are in the que and the IRS and state agencies generally try and work as fast as they can in getting you your money.  Some states, like California, are in a bad place financially are just dogging it but you will get your money or the State will owe you interest!

Hope all is well with all of you!

April 11 2009

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale.   Have you read my book, “Bad Tax Idea, Good Tax Idea“?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Kim Isaac Greenblatt

Use Your Time Now For Planning For Next Year