It's every (US) Internet Marketer's favorite time of the year, your chance to share your hard-earned monies with those less fortunate than you, courtesy of the IRS. A couple tips that might help you out if you are sweating the upcoming April 16th due-date:
1. You can request an extension if you don't have your paperwork ready to go. I've done it every year for as long as I remember, it can save you a lot of hassle, and money in penalties and interest. You used to have to give the IRS a good reason why you couldn't get stuff done by April 15th, but now you can request an automatic extension for a later due date for any reason (October 15th for most of us). The paperwork is Form 4868, you can file it online in about 2 minutes, and its a lot better than paying the penalty if you file nothing and are late.
Unfortunately, filing a 4868 does NOT mean you can wait to pay what you owe though (it only gives you longer on the paperwork) you are still expected to make your "estimated" tax due payment, and you can owe penalties and interest if you don't. If you have no idea what you owe yet, make payments that put you under the "Safe Harbor" protections. Basically, if you pay at least 100% of same amount of your total tax bill from the year before (2010), even if that is nowhere close to what you will owe this year because you made a lot more this year than before, it will still protect you from the penalties and interest, which can be huge. (the 100% applies if you made <150k AGI, you have to make payments of 110% of your 2010 tax bill if you made over $150k that year).
Its to your advantage if you were balling in 2011, but didnt do nearly as well the year before, to file an extension and make your estimated tax payments based on that 2010 number. You'll still owe the same amount eventually, but you are basically getting an interest-free loan from the govt till the end of your 4868 extension time. Every day you can legally delay giving the gov't more of your hard-earned monies is to your advantage, use the Safe Harbor rules in your favor. They will also protect you if 1)you end having underpaid by less than $1,000 and 2) you paid at least 90% of your 2011 tax liability in estimated payments through the year.
Good luck
*Disclaimer, I'm not your CPA, but I did stay at a Holiday Inn
1. You can request an extension if you don't have your paperwork ready to go. I've done it every year for as long as I remember, it can save you a lot of hassle, and money in penalties and interest. You used to have to give the IRS a good reason why you couldn't get stuff done by April 15th, but now you can request an automatic extension for a later due date for any reason (October 15th for most of us). The paperwork is Form 4868, you can file it online in about 2 minutes, and its a lot better than paying the penalty if you file nothing and are late.
Unfortunately, filing a 4868 does NOT mean you can wait to pay what you owe though (it only gives you longer on the paperwork) you are still expected to make your "estimated" tax due payment, and you can owe penalties and interest if you don't. If you have no idea what you owe yet, make payments that put you under the "Safe Harbor" protections. Basically, if you pay at least 100% of same amount of your total tax bill from the year before (2010), even if that is nowhere close to what you will owe this year because you made a lot more this year than before, it will still protect you from the penalties and interest, which can be huge. (the 100% applies if you made <150k AGI, you have to make payments of 110% of your 2010 tax bill if you made over $150k that year).
Its to your advantage if you were balling in 2011, but didnt do nearly as well the year before, to file an extension and make your estimated tax payments based on that 2010 number. You'll still owe the same amount eventually, but you are basically getting an interest-free loan from the govt till the end of your 4868 extension time. Every day you can legally delay giving the gov't more of your hard-earned monies is to your advantage, use the Safe Harbor rules in your favor. They will also protect you if 1)you end having underpaid by less than $1,000 and 2) you paid at least 90% of your 2011 tax liability in estimated payments through the year.
Good luck
*Disclaimer, I'm not your CPA, but I did stay at a Holiday Inn
