How to File for a Tax Extension

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If you can’t file your federal tax return by the April 18, 2011 deadline, you can file for an extension. It’s important to remember, though, that an extension to file is not an extension to pay any taxes you might owe -- the extension only covers filing of the actual paperwork.



Failure to pay a balance owed to the IRS, regardless of requested extensions, results in penalties for late filing and possibly fees. State tax laws vary, so if you need to learn how to get a state tax extension, you should consult your state's specific tax instructions.

For most taxpayers, to get an extension until Oct. 17, 2011, you’ll need to submit Form 4868 by April 18.

1. Your Social Security number

2. Your spouse's Social Security number, if you’re filing a joint tax return

3. Your complete mailing address

4. Your total tax liability, which can be found on line 60 of Form 1040.

5. Total amount of your tax payments – found on line 71 of Form 1040.

6. Your balance due -- if you don’t owe additional tax, you can enter zero here. Otherwise, you will use the total tax due shown on line 75 of your Form 1040.

If you need help with these numbers, click here for How to File Your Taxes.

If you don’t owe additional taxes, make a copy of the form for your records. If you do have a balance due, you can send a check or money order, (simply include that with your form and be sure to write your social security number on the check), or you can pay electronically via the IRS website.

How to Freeze Your Credit Report

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Before asking the agencies to freeze your credit report, you should know the particular rules, fees, and regulations for each state. Where you live can affect the costs involved and the duration of the freeze itself. Once you know the rules for your state, you should gather the following information:

1. Your name.
2. Your social security number.
3. Your date of birth.
4. Your address.
5. Any addresses over the last two to five years.
6. For Experian and Equifax, proof of current address, such as copy of a utility bill, or bank or insurance statement.
7. For Experian and Transunion, a copy of your driver's license or state-issued identification card.
8. If you have been the victim of identity theft, and are claiming exemption from fees, you must also provide a copy of a police report, investigative report, or report filed with a law enforcement agency.
9. If you are over 65, and your state grants a free exemption for senior citizens, you may also have to provide proof of age.
10. Send all of the required information, along with a clearly worded request for the bureau to freeze your credit report, via certified mail to the addresses below.A few states allow you to send the information by regular mail, and a few even allow you to place a freeze over the phone. In order to help you get started, we have included links to sample freeze request letters provided by the AARPbelow.
11. If you have any questions for a specific credit reporting agency, you can visit their website or try to call them at the numbers below. You should understand that the agencies may try to discourage you from freezing your credit, as this is their business, and it is not in their best interest. However, only you can decide whether freezing your credit is a good idea.

Equifax: 1-888-685-1111
Experian: 1-888-EXPERIAN (1-888-397-3742)
TransUnion: 1-888-909-8872

Facing Baby Boomer Retirement Problems

As the generation of American Baby Boomers head into retirement age, many are astounded by just how much they didn’t save over the years. With the continuous high cost of living increases and the downfall of many stocks, the baby boomer generation is finding it really hard to retire.

Why The Failure?

For many baby boomers, the reasoning behind the failure to adequately save for retirement is the same. Most baby boomers started too late – well into their thirties in some cases – instead of capitalizing on the funds earned in their late teens/early 20’s. As a result, many people over the age of 60 have saved barely a quarter of what they really need to retire on.

Today’s personal finance experts are urging the working youth to start contemplating their retirement savings plans as soon as they start earning an income. Many youth still struggle to grasp the concept of the importance of savings but many are getting on board with starting their employee-sponsored 401k and other retirement savings vehicles. For baby boomers, 401k accounts did not start appearing until the early 1980’s which means they had less time to save than young workers today. Back then, the 401k account was meant to be a supplemental account for retirement whereas today they are a full vehicle for retirement savings funds.

Another possible reason for the lag in savings funds is the fact that many American families find it hard to save. Their income is often already extended just to live month to month, from one paycheck to the next. They have been neglecting their retirement accounts in lieu of keeping the lights on and food on the table. With the additional loss of retirement funds due to the recession and the high rate of unemployment, workers of every age have been hit hard. Those so close to retirement are really feeling it the most.

What Can You Do to Recover?

As the saying goes, it’s never too late to start saving. The main resource most people have for making it to retirement is to keep working as long as you can, even if it is only part time work. If you have managed to keep your job long-term, it will certainly benefit you to stick with it while you put serious focus on your savings plan for the very near future. You will also get to contribute to your 401k for a longer period of time and likely have the ‘extra’ income necessary to continue making deposits to your IRA or other savings accounts designated for retirement. There are provisions within the government that allow people over 50 years of age to contribute additional funds into their retirement funds as a method of catching up on savings. If you are not able to contribute the maximum amount of funds to your 401k account, make sure you are at least depositing enough to get the company match. At this point in your life, it would be detrimental to refuse free money in retirement.

The next thing you can do to help finance retirement is to delay taking your Social Security payments until you have reached 70 years of age. Even though an individual can claim full benefits at the age of 66, taking benefits too early also means you lose some of the benefits. At 70-plus years, you would be entitled to full Social Security benefits.

Committing to Your Plan

You likely were not caught completely off-guard by the fact you are lacking retirement funds but the realization can still be difficult to live with. The primary concern you should have right now, as you head toward retirement age, is to not give up all together. You need to instead be aggressive about your savings plan for retirement and educate yourself on all available options.

If the task and thought of prepping for retirement overwhelms you completely, you might be well-served to consult with a financial planning effort that can help you put your retirement goals and needs at the forefront of your financial life. Even if you only use the advice and resources initially, it can be a great way to motivate yourself into taking action on your own and help you see the light at the end of the tunnel.

Ed O’Brien is a seasoned writer on issues concerning repairing credit having a strong background in business and personal finance. His blog, Credit Repair, offers free advice to those seeking ways to improve their credit scores.

5 Low Tech Ways To Pay Off Debt

Image via WikipediaYou go through your life noticing everything around you except what is going on in your finances. Unless your a royal nerd you are  sloppy with your money. But the day comes when you wake up because you have just opened that credit card bill and see a five figure balance. You think what did I get myself into. It's time to get things in order and pay it off.

If you realize something has to be done, you have just done step one of the plan. Realizing something is wrong and deciding to fix it is the first step on the journey out of debt and responsible living.

Go through your check register and credit card statements and see where your money is going. Write down everything you spend for one month, you'll be shocked how you waste money. Total up all your debts so you can see the monster your going to attack and destroy.

Forget the computers and spreadsheets get a piece of paper and a pencil and write down your paycheck at the top of the page. Now write down every bill that must be paid from it. Then set aside a portion for food, gas and a small pocket money allowance. What ever is left, use to pay down debt. Some pay periods you may only have $50 to pay down debt, while others you may have $500. Do this the day you are paid so you will know there is no more money to spend.

Put all you credit card debts on low interest balance transfer cards. This will lessen the time for repaying and save money to.

All this is not going to work if you keep going back to using your credit card. The credit cards have to die. Cut them up and say good bye, you won't miss them after a while. Remember they are the ones that got you into this mess. Well, really you got yourself into this mess but they helped.

Paying with cash gives you immediate feedback of the consequences of your spending. Credit cards come with an anesthetic so you don't feel the pain of your spending. I guarantee you will spend less over time with cash. Your spending IQ will go up when you find cheaper places to eat and shop.

Being open and honest with your better half will make the process go much better. The times will come when you feel constrained with the spending plan. It will cause some friction at first. But a healthy budget committee meeting will tackle that problem. Charting your budget and your debt paying, will build confidence in your plan. Seeing that debt go down will inspire everyone to keep going.

You will find motivation for your plan along the way because goals will be attained and new goals will be worked toward causing you to feel good about what you are doing. If you sell something or receive an unforeseen income all the better to get you where you want to be.

To Do List:

• Admit you have a problem with debt and form a plan to conquer it.
• Set up a budget with Income and expenses listed.
• Cut up the credit cards and switch to cash.
• Communicate often and honestly.
• Find motivation to carry on and finish.

Tools needed to eliminate debt:

1. Paper and pencil
2. A plan
3. Honesty
4. Motivation.
5. Scissors to cut up credit cards

With these tools and your plan, you will be able to take your debt and eliminate it. I guarantee it.


Reader: Do you have any tips on how to tackle the debt reduction process?

Money Saving Deals For April, May and June

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The new quarter is fast approaching. Taxes are due soon and the refund checks are in the mail. If you want to save some money, I have listed the best buys for the next three months. The list is courtesy of LifeHacker.com. Happy Shopping.

April

• Cruises: Cruise lines are moving ships around this month. You can even book and travel on short notice.
• Car accessories & parts
• Laptops
• Fabric: Craft stores are shifting from winter fabrics to lighter spring fabric.
• Cookware
• Vacuum cleaners: The new models arrive in June.
• Sneakers: Sneaker makers are targeting less serious runners.

May

• Patio furniture: New stuff hits the floor, old stuff needs to go. Also, check out garage sales for last year’s stuff.
• Party supplies
• Cookware
• Vacuum cleaners: Just like last month, clearing out old models.

June

• Gym memberships
• Tools (June 1-20)
• Suits (June 1-20)
• Dishware: Like May, June is a wedding month, so dishes are cheaper.
• Off-season sports gear

For their complete list go to: http://lifehacker.com/#!5736625/the-best-times-to-buy-anything-in-2011

Do Your Kids Need A Cell Phone?

Image by yisris via FlickrIn most cases, whether or not to get your child a cell phone, especially if they are a teenager, is going to be like any other parenting decision. Things to consider include:

• Does your child really ‘need’ a cell phone?
• Can you afford a cell phone?
• Is your child responsible enough to take care of a cell phone?

My daughter came home from school one day and said, “I need a cell phone.” She’s 10. What I heard was, “Everybody has a cell phone. Can I get one too?”

My wife and I aren’t the type of parents to run out and buy something just because someone else has one. I know this gets frustrating for the kids, who see all the toys and gadgets their friends have, and would like to have more.

We never had the cell phone issue growing up. We just had to make sure we had enough change in our pocket for the pay phone, or call from the school office if there was a problem.

When we sat down and asked her why he thought he “needed” a cell phone, she gave the usual answers:
In case there’s an emergency at school
In case I need you to pick me up from school early

Both of these I shot down with, “then you can go to the school office and call us from there.”

There are different reasons why some kids should have phones and others don’t really need them. These reasons have nothing to do with age, but with their activities. If they are left alone often, then I can see having a cell phone, or if they will be late from a school activity or other event.

Safety is probably the main reason I would consider a cell phone for children.

If you’re considering getting a phone for your child, here is a link to some phones for kids with different levels of parental control: http://cellphonesforkidsguide.com/2010/05/08/best-cell-phones-for-kids-2010/

Reader: What's your experience with kids and cell phones?