Tax Refunds & Advice

Missing a tax deadline is not a huge deal. That being said, this is not something you should take lightly. In other words, just because you can get away with missing a deadline does not mean that you should take your good old time. It is very important to get your paperwork to the IRS on time. If this does not happen for one reason or the next, make sure you take the proper steps.

First things first, if you miss a deadline you need to speed up and get your return to the IRS as quickly as possible. In other words, you don’t want to delay the process any longer. Things come up, and the IRS understands. That being said, you should not abuse the power of having the ability to miss a tax deadline.

Of course, just because you can miss a deadline does not mean that the IRS will let you go without a slap on the wrist. There are late filing penalties that you must be aware of. If you have a balanced owed on your return, the IRS will charge you both penalties and interest. As you can see, it is not a good idea to be late with your return because it could end up costing you in the long run. What type of penalty will you face? At this time, the penalty is five percent for each late month, a half percent for a late payment, and five percent interest per year. The longer you delay the more you will pay.

Missing a tax deadline may not be the end of the world, but you do need to know that this can cause issues in the future including penalties and interest.

Are you aware of the marginal tax brackets for 2009? Even though you may still be worried about the end of this year, you need to look ahead. After all, 2009 is going to be upon you soon enough.

Tax rates apply to taxable income. That being said, deductions and adjustments can and will lower your taxable income. Generally speaking, your taxable income will be much less than your total income. This works out well from a tax point of view because it means that you will owe less.

Single Filing Status

10% on income between $0 and $8,350

15% on income between $8,350 and $33,950; plus $835

25% on income between $33,950 and $82,250; plus $4,675

28% on income between $82,250 and $171,550; plus $16,750

33% on income between $171,550 and $372,950; plus $41,754

35% on income over $372,950; plus $108,216

Married Filing Separately Filing Status

10% on income between $0 and $8,350

15% on income between $8,350 and $33,950; plus $835

25% on income between $33,950 and $68,525; plus $4,675

28% on income between $68,525 and $104,425; plus $13,318.75

33% on income between $104,425 and $186,475; plus $23,370.75

35% on income over $186,475; plus $50,447.25

Married Filing Jointly

10% on income between $0 and $16,700

15% on income between $16,700 and $67,900; plus $1,670

25% on income between $67,900 and $137,050; plus $9,350

28% on income between $137,050 and $208,850; plus $26,637.50

33% on income between $208,850 and $372,950; plus $46,741.50

35% on income over $372,950; plus $100,894.50

Head of Household Filing Status

10% on income between $0 and $11,950

15% on income between $11,950 and $45,500; plus $1,195

25% on income between $45,500 and $117,450; plus $6,227.50

28% on income between $117,450 and $190,200; plus $24,215

33% on income between $190,200 and $372,950; plus $44,585

35% on income over $372,950; plus $104,892.50

With this information you can determine how much money you will owe in taxes in 2009, as well as how much you can save by searching for qualified deductions and adjustments.

Are you thinking about withdrawing money early from your IRA? If so, you probably have a good reason for this. Even though most experts advise against this, it is something that many people are doing during tough economic times. But before you join this group, make sure you know what you are doing from a tax standpoint. Remember, early withdraw of your funds can result in penalty as well as increased taxes.

Before you take money out of your IRA you should ask yourself the following questions:

1. What is the money for, and is this my only option?

2. How will this effect my retirement?

3. At what age did you fund your IRA? Are you still doing so?

4. How much money are you going to withdraw?

5. What tax bracket are you in, and how will an IRA withdraw change this?

There is no denying that saving for retirement is the last thing on the minds of many Americans. After all, if you have to decide between saving for retirement and paying your mortgage you will probably opt to keep your home.

Are you strongly considering an early withdraw from an IRA? In this case you need to make sure that you are aware of every implication. To avoid any surprises consult with a tax professional before you decide to make any move. This way you will know what you are getting yourself into from a penalty and tax point of view.