Happy Emancipation Day! Does anyone know what Emancipation Day is? Not in California, for sure. It is a holiday celebrated in Washington DC because Abramham Lincoln freed 3,100 slaves in DC on April 16, 1862. Because April 16 is Saturday, the day is celebrated on Friday the 15th. I guess a DC holiday has the effect of a national holiday. So we are emancipated from filing our taxes (at least until Monday the 18th). Now if we could just celebrate Emancipation Day all year long, then we are getting somewhere. Here is a link for a little more info on Emancipation Day:http://www.times-standard.com/localnews/ci_17854769Well now I have more time to file extensions.
Brian’s Tax Musings
Sorry about not posting yesterday, but I was on a deadline and forgot (you are probably sick of me anyway). Props to Bill Moser of Elizabeth St Painters for putting my contact info in his newsletter. Appreciate it!Do you itemize your deductions? If so you can either deduct your state income tax paid in 2010 or your sales tax, whichever is greater. The IRS has a table to calculate how much sales tax you can claim based on your income. Then you can add sales tax paid on a car, boat or airplane (?) Anyway it is an either/or situation; you can’t take both.
Brian’s Tax Musings
Can’t pay your taxes by April 18? Even if you don’t pay, file your return on time. Failure to pay tax penalty is 1/2% a month plus interest (4% annualized right now). Failure to file penalty is 5% a month up to maximum of 25%. These penalties are based on tax, so if you are due a refund, there are no penalties (the IRS already has your money.) If you owe, as I said in a previous post, you can set up an installment plan with the IRS to make monthly payments of your taxes (and penalties and interest).