Wednesday, February 28, 2007

Delaying My Tax Filing

You heard me right, MoneyMan hasn't even attempted to do his taxes yet. But, as some of you may have heard, and as some of you procrastinators may be happy to hear, there is a reason to wait to file your taxes later this year.

The gist of the story is that many brokerage firms have been requesting filing extensions and plan to be sending out restated 1099 forms due to some late changes in the tax laws last year. This would require you to refile your taxes if you used any information in the original forms they sent out.

So if you haven't opened your W-2 envelope, pulled out your calculator, sharpened your pencil, bought your tax software, or done any of the other fun things associated with tax season, breathe easy.

I'm not looking forward to my taxes this year. I always prefer to do them myself because they help me to understand how the decisions I make during the year impact my tax bill, and they help me to plan some tax strategies for the following year.

One example of this is when I noticed last year on my state and city tax forms that I could deduct any interest I received on US Government securities, such as treasury bonds. I told myself I would have some income to put on that line this year (as long as the rates made sense), and as a result I started putting more of my savings into Treasury bills, which have actually been yielding more than my ING Direct savings account this year, in addition to having the favorable tax status.

So anyway, I recommend doing your taxes yourself, but I also recommend that you wait until the middle/end of March if you will be reporting any 1099 income that might be in danger of a restatement.

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