There are officially two weeks until April 15 to get your taxes filed (unless you elect an extension). If you have not filed yet, here is a check list of things to do between now and then:
- Fully fund IRAs for you and your spouse.
- Fund your retirement plan (KEOGH, SEP, SIMPLE). Even if you have not set one up, there is time for some types of retirement plans to be created and funded by April 15 or October 15 if you do an extension.
- Unlike prior years, you have a decision on whether you wish to pay in any amounts due with your extension. In past years, this would cost you the regular annual interest rate (currently 3%) plus .5% for each month that you are late. This late penalty is based on being one day late in a month so if you pay on the first day of the month, the IRS could assess the full .5% penalty. However, this year due to the delays in getting the forms released, the IRS will not charge this penalty. They will charge interest. If your borrowing costs are greater than 3%, you may want to consider taking advantage of this, however, the interest is non-deductible.
- Review your farm income averaging options. Even if this does not save money for you this year, it may save money in 2013-15.
- Make sure to determine if any state or federal credits apply to your tax situation. In many cases, these credits can easily add up to real money and we find that many times they are overlooked. In some states, if you are unable to use the credits, you may be able to sell them to others that can use them.
This is a quick check list for the last two weeks of tax season. The delay in the release of the tax forms has caused this tax season to bunch up even more than normal. We will be preparing many returns between now and April 15 and if yours is one of them, make sure to get is filed timely.