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Gary Steciuk

Don't be fearful of tax extensions

By Gary C. Steciuk, Personal Finance

Saturday, April 14, 2007

The tax deadline is April 17 this year, which leaves little time for procrastinators to file. If you have not filed yet, there are still a few days and one big weekend left to get your paperwork together.

Carroll County is full of tax preparers and other financial professionals who can assist you in completing your return. However, your tax preparer might suggest that you file an extension at this point if you have not yet begun working on your return.

An extension is not something to be afraid of. Doing your taxes correctly and accurately is very important and can be a complicated process for some.

Filing an extension keeps you in good standing with the taxing authority, even though your return will not be filed on time. The extension is simply a notification to the taxing authority and a legal method of obtaining more time to get the tax return completed correctly.

Many people who procrastinate about filing their returns owe money to the IRS. It is important to understand that filing an extension does not remove the obligation to pay your taxes by April 17. In filing an extension, the taxpayer is required to make an accurate estimate of the amount of taxes owed and pay that amount with the filed extension.

The IRS can impose penalties if you substantially underestimate the amount of taxes owed at the time the extension is filed.

While tax preparation issues can be confusing, it is possible and acceptable for many people to complete their taxes on their own. You can easily file an extension on your own if you are not working with a tax preparer.

The important thing is to give yourself enough time to understand your return and complete it accurately.

Many people who rush through tax returns at the last minute miss money-saving deductions. Most Carroll County residents will be able to take deductions for either property taxes or mortgage interest.

While itemizing one should look at other possible deductions that could be taken. Clients often ask about deducting medical expenses, but there are limits on one's eligibility for deducting medical expenses.

Generally, one must incur a lot of medical expenses to be able to deduct them. Yet, many elderly individuals with smaller incomes will have enough medical expenses to be eligible to get a break on their taxes.

Take these last few days before the deadline to understand your tax options and prepare your return. For those who cannot find the time this week, be sure to file an extension and protect against failure to file penalties and fees.

Reach financial adviser Gary C. Steciuk at gary@gcsfinan cial.com.