Thursday, April 12, 2007

Deadline for Taxes

Here I am at 1:30 AM, and I am no longer productive working so I thought I would throw out my last minute tip.......

1. File an extention -- This is something that many people are afraid of, but remarkably it can provide many benefits. Some positive benefits include -- more time to save money to make deductible traditional or SEP IRA contributions for 2006, sanity for your accountant, lower audit risk (although denied by the IRS) statistically extended returns have a slightly lower audit rate. The major con is a two edged sword -- extending lentghens the statute of limitations 6 months, providing the IRS more time to audit and you more time to amend returns an collect refunds. Although the extra 6 months to the IRS examination department is daunting, the extra time to claim refunds on amended returns can be invaluable in some cases.

2. Pay the State of Utah on time -- If you owe tax on your return, payment on the deadline is important. Remember an extention only extends the time to file, not pay! However, if you owe both the Federal government and the State of Utah and cannot afford to pay both -- pay Utah in full on time. Utah's penalty for not paying on time is 10% or 40 bones, if you owe less than 400 dollars or less you could have as much as a 40% penalty for $100 tax or a 400% penalty for $1 tax for not paying on time! Ouch! The IRS is much kinder and gentler on this issue, the Federal penalty for not paying on time on extention is .5% a month up to 5% of the tax owed. Both carry a 8% interest factor. Moral is pay Utah on time or suffer the consequence.

I'll be signing off untill the 18th.

Happy Filing.


Anonymous said...

Wow- what valuable information. What a hard working man you must be. I'm really impressed with the level of competence and dedication you show in your profession. Your life must be very satisfying. I bet your wife is a hottie too.

pramahaphil said...

Thanks, Honey.

I'll be home at 6:00pm

JellymanJake said...


You are an accountant.. Good for you. This is Jake from K-town. I am getting married and what to invite you to the reception. send me your email to Thanks man. Talk with you soon.

pramahaphil said...

Good to here from you Jake I'll be in touch.