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An Independent Monthly Newspaper Serving the Community since 1988


Tax filing deadline looms

—Jason Alderman
Nobody likes being nagged, but I’m going to risk reader displeasure by reminding everyone that there are hefty financial consequences if you owe income taxes and do not file a return on time—or at least request a filing extension.

Ordinarily, the federal income tax deadline is April 15, but this year, the IRS has granted a reprieve until April 18. Nevertheless, here’s why procrastinating is a bad idea:

  • If your 2010 federal tax return (or extension request) isn’t postmarked or electronically filed by April 18, the penalty on any taxes you owe increases dramatically. Generally, you’ll have to pay an additional five percent for each full or partial month you’re late, plus interest, up to a maximum penalty of 25 percent. However, if you file your return or request an extension on time, the penalty drops to 0.5 percent per month, plus interest.
  • Here’s how it can add up: Say you owe $2,000 in federal income tax. If you haven’t requested an extension, you would be charged an additional $100 (five percent) for each month you’re late. Had you filed for an extension, the penalty would drop to only $10 a month (0.5 percent).

Contact the IRS early if you won’t be able to pay on time. They may even waive the penalty, depending on your circumstances. Call (800) 829-1040, or visit for more information.

Another way to avoid a penalty: The IRS accepts payment by credit or debit card, with a small convenience fee that is tax deductible if you itemize expenses. Just be sure to pay off your card balance within a few months or the interest accrued might exceed the penalty.

A few additional tax-filing tips:

  • Find out what’s new. Because the tax code changes every year, scan the IRS’ Tax Information for Individuals Web site ( for updates before diving in. Many of your questions are likely answered in its Frequently Asked Questions section.
  • Make sure your return is accurate. Common tax-filing errors include:
  • Omitting or filling in incorrect/illegible taxpayer ID numbers, filing status, dependent names, and Social Security numbers.
  • Documentation not attached (W-2s, supplemental forms, etc.).
  • Omitting income items.
  • Tax return not signed and dated.
  • Information entered on the wrong lines.
  • Child tax credit incorrectly calculated.
  • Math errors. (Tax software does the math, but you’re still responsible for entering correct numbers initially.)
  • Ask for help. If calculating your own taxes is too confusing or time consuming, consider using tax-completion software like Turbo Tax, or hire a tax professional. A sharp preparer could save you a bundle by finding hidden credits or deductions.

If cost is an issue, several free options are available to seniors, military, and low- and middle-income taxpayers:

  • The IRS sponsors the Volunteer Income Tax Assistance Program (VITA) and Tax Counseling for the Elderly (TCE). Read “Free Tax Return Preparation” on the IRS Web site for information.
  • AARP Tax-Aide volunteers, who are trained by the IRS, provide free tax preparation to low- and middle-income taxpayers, with special attention to people over age 60. Go to for information.
  • Military personnel and their families worldwide can get free assistance through a program offered through VITA. Check with your base for details.

Read contracts carefully

—Jason Alderman
How often are you asked to sign something? I don’t mean autographs or birthday cards, but legally and financially binding documents—everything from endorsing a check to signing a sales receipt to buying a house. Either way, they’re all contracts.

In broad terms, contracts are mutually binding agreements between two or more parties to do—or not do—something. Once a contract is in force, it generally cannot be altered, unless all parties agree. And, with very few exceptions, they cannot easily be broken.

Sometimes contracts are formal, signed documents that outline specific conditions and penalties if those conditions are not met: For example, if you don’t make your mortgage payments, the lender can foreclose on your house. Other times, they are verbal or implied agreements: If you buy spoiled milk, you can ask for a refund.

Before you enter into a contractual agreement, try to anticipate what could go wrong. For example:

  • You sign a lease, but later decide you can’t afford the rent or don’t like the neighborhood.
  • You buy a car you can’t afford, but when you try to sell it, the car is worth less than your outstanding loan balance.
  • You buy something on sale and don’t notice the store’s “No returns on sale items” policy.
  • You cosign a lease with a roommate who later backs out, leaving you responsible for the rent.
  • You rent a car and later learn you accidentally agreed to optional insurance coverage or other features you didn’t want or need.
  • You agree to cosign a loan, and the other person stops making payments, leaving you responsible for the full amount—otherwise, your credit will suffer.
  • You buy a car and later notice that the sales agreement includes an extended warranty or other features you didn’t verbally authorize.
  • You buy a two-year cell phone plan, but after the grace period ends, discover that you have spotty reception.

Financially inexperienced teenagers and young adults often make such mistakes, so be sure to discuss the implications of signing contracts with your kids before they turn 18.

A few additional tips:

  • Make sure anything you sign contains no unfilled blank spaces, even if the other party promises to fill them in a certain way.
  • Don’t be afraid to ask to take a contract aside or bring it home for more careful analysis or to get a second opinion. A lawyer or financial advisor can help.
  • Don’t be pressured into signing anything: If salespeople try that tactic, walk away.
  • Make sure everything you were promised verbally appears in writing. This is particularly important for terms and conditions such as interest rates, down payments, discounts, and penalties.
  • Keep a copy of every document you sign. This will be especially important in cases of contested rental deposits, damaged merchandise, insurance claims, extended warranties, etc.
  • Pay attention to prechecked boxes in online offers before submitting payment information for an order; they could bind you to terms you don’t want.
  • Take along a “wingman” when renting an apartment or buying a car.

Remember: Contracts are designed to protect both parties. Just make sure you fully understand all details before signing on the dotted line.





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