I just saw an article in Accounting Today that Val Kilmer is being leined by the IRS for close to $500,000. While not in the scope of Nicolas Cage or Willie Nelson (who had to sell a golf course to pay off his taxes), it still is a pretty big amount. See the article here:http://www.accountingtoday.com/news/IRS-Files-Tax-Lien-Against-Val-Kilmer-56794-1.htmlTo all my client’s who have business managers and other people helping with their taxes: it is not a bad idea to take at least a little interest in your tax returns. At least look them over and ask questions if things look at little funny. Too many times people don’t take responsibility for their returns, but to the IRS they are the responsible parties. As a preparer who tries to make sure everything is right before I even discuss final tax information with you the client, I really like it when you do ask me questions; it means you are interested in the things I prepare for you; you don’t just dump it on me and say take care of it.
Brian’s Tax Musings
A little reminder – estimated federal and state income tax payments for the 4th quarter of 2010 are due January 15. If you have the vouchers make sure you pay them unless your situation has changed and we have discussed it already. If your situation has changed and we haven’t talked about it, call or email me and let’s go over things before you blow off the payment. If you don’t know you estimates and I prepared your return last year, let me know and I can get you the information. Also, business payments (estimates, payroll taxes) to the IRS have to be paid online in 2011 instead of using the deposit voucher you take to your bank.
Brian’s Tax Musings
Remember, you should be seeing more money in your net salary check because of less Social Security withholding (although because there is no more Making Work Pay Credit, it should not be a full 2% of your gross salary.) Whatever additional money you get, try and shift it over to a savings or investment account instead of spending it (or spend some and save some). If you set up an automatic withdrawal from your checking to your savings, you won’t even miss the money, and the compounding will start to build some money for you (although if you keep it in a !% savings account, it may take some time – but eventually interest rates will go up again so it will still amount to something – especially if you do this over 10 or 20 years).You could take some of this money (or unspent Christmas Bonuses – even though that is an oximoron, isn’t it) and put it into a traditional IRA before April 15 and get a tax deduction as well as deferred taxes on the earnings until retirement. That is always something to think about.