Tax Refunds & Advice

The deadline to file your 2007 tax return is April 15, 2008. Does this leave you enough time to take care of all the details? If so, you should move forward right away and put your taxes behind you for the time being. But on the other side of things, if you need more time you may want to file an extension. This is not going to make things easier on you for long, but at the very least it will give you some additional time to take care of any details that have been eluding you.

By filing Form 4868 the IRS will give you another six months to file your return. By doing this, your new deadline would be October 15, 2008. But guess what? Just because you file an extension does not mean that you have more time to pay if you owe the IRS any money. To avoid penalties, you must still pay up by April 15, 2008.

Here are a few steps to follow if you are interested in filing an extension:

1. Go over your tax return as to get an idea of how much you owe, if anything. As mentioned above, you need to send this payment by April 15 even if you file an extension for your return.

2. You can ask your tax professional for Form 4868, or print it out online. Once you have the form in front of you, fill it out, including the amount of money you owe, and return it to the IRS with a check for the appropriate amount.

3. Make sure that your form and payment is postmarked by April 15.

As you can see, filing a tax extension is not a difficult process. But with that being said, this is not a habit that you want to get into. Remember, you are only buying yourself six more months. Sooner or later you are going to have to sit down and complete the entire return process. 

If you are following the race for the Democratic presidential nomination, you are well aware that contender Hillary Clinton and her husband Bill have been in the forefront for quite some time. As if there was not already enough information to take in, the Clinton’s tax data was made public last week, and there are a few details that are quite interesting.

Over the last eight years, the two have combined to earn approximately $109 million. This is a huge turnaround from the day that they left the White House in 2001 with tons of debt thanks to mounting legal bills.

Where did all of this money come from? The data shows that approximately $92 million is from speaking and book deals. In 2004, Bill Clinton’s autobiography, My Life, brought in a $15 million advance. To go along with this, the former president is regularly paid in excess of $250,000 for speaking engagements.

During this time frame, the Clintons paid almost $34 million in federal taxes. Luckily for them, they were able to deduct $10.2 million thanks to a rash of charitable contributions.

Jay Carson, a spokesman for the Clinton campaign, said, “The Clintons have now made public 30 years of tax returns, a record matched by few people in public service. None of Hillary Clinton’s presidential opponents have revealed anything close to this amount of personal financial information.”

As you can see, the Clintons are not struggling to stay afloat financially. Not only are they earning tens of millions of dollars per year, but they are giving away quite a bit to charity. With this tax data now available to the public, it will be interesting to see if other presidential hopefuls follow suit with more detailed information of their past earnings.

Although the tax filing deadline for 2007 is still a week or so away, approximately 47 million taxpayers have already filed. According to the Internal Revenue Service, almost $107 billion in refunds have already been claimed. As you can imagine, there is plenty more to come as millions more rush to file before the deadline.

The average refund to this point is $2,708, as reported by the IRS. Although taxpayers receive the same refund no matter how they file, this year has been the most popular for the e-filing option. Of the almost 47 million who have already filed, 38 million have done so electronically. This is an increase of five percent over last year’s number at this time.

Although many use the e-filing method through their tax professional, there is a growing group who has decided to rely on this option when filing on their own. Approximately 12.3 million taxpayers have filed electronically from their home computer. When compared to last year, this is a 14 percent increase. What does this say? Simply put, those who are doing their own taxes are finding it simpler to use the internet to file as opposed to the old method of paper forms.

With April 15 closing in, more and more taxpayers will file as to avoid a penalty. As this happens, the number of refunds is sure to grow exponentially. If you have yet to file, get started right away. You do not want waste your refund money on late fees, do you?