Tax Filing Deadline – Time to Review

Now’s the time to plan for next April 15th by making adjustments to your tax withholding and tax payments.

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April 15th is here, and for most of us our tax return is filed and thoughts of income taxes are behind us. (The actual filing deadline is April 18th this year because Emancipation Day is observed on April 15th in the District of Columbia.) Before you put your tax files away for 2010, let’s take a moment to review our tax efficiency to determine if adjustments should be made for 2011.

The first priority in tax planning is to minimize the total amount of tax you owe. The second priority is to delay paying the tax as long as possible without incurring penalties. Take a look at your tax return for 2010. Did you have a refund or did you owe tax upon filing? Some people think that if they are entitled to a refund it’s because their accountant did a good job. Your accountant may indeed have done a great job of finding deductions. However, in most cases, it’s just because you had too much tax withheld.

Our goal is to reach April 15th and have our clients owe $500 or more without penalties. Then our clients have had their money working for them as long as possible. Generally, you will not have to pay a penalty for 2010 if any of the following apply:

  • You owe less than $1,000. Thus the goal of owing $500 upon filing.
  • You paid in at least as much as you owed in 2009.
  • You did not have a tax liability for 2009.

Higher income taxpayers have an additional hurdle.  If your adjusted gross income for 2009 was more than $150,000 ($75,000 if your 2010 filing status is married filing a separate return), you need to have paid in 110% of your 2009 tax liability to avoid the underpayment penalty.

Stop giving the IRS an interest-free loan. Adjust your tax withholding or estimated tax payments to make sure you pay in the minimum required to avoid penalties. Then keep your tax projections up-to-date to avoid surprises next April.

Will Your Money Last Through Retirement?

No one wants to run out of money. But without goals and a solid plan,
how can you know for sure whether you’re on the right track?

Will I be able to maintain my current lifestyle?

What will my monthly income be in retirement?

Can I protect my hard-earned savings and still
have the income I want?

Rodgers & Associates answers questions like these every day.

Get Personalized Answers
2025 Lititz Pike, Lancaster, PA 17601
Phone: 717-560-3800, Toll-Free: 888-876-3437