Don't Let the IRS Rob You: Why You Should Hate Income Tax Refunds

It's tax season again, and most Americans are happy anticipating it for one thing- their tax refund. You can't wait to get your check from the United States Treasury, but why?

Don't you realize that you're not earning anything? You gave the IRS and interest free loan, and now they're just giving it back.

Jeff Schnepper said it best in his MSN Money Article:

"People just don't learn. They want that check from the government. But I can give you the same deal.I hereby offer to allow anybody reading this to send me money.

I'll take cash, checks, money orders, even food stamps. Send me as much as you want. And I promise -- on my word as MSN Money's tax expert -- that I'll send it back to you on April 15, without interest."

It sounds ridiculous, but that's the point. The same thing happens when you get a tax refund from the IRS.

You Need Willpower, Not a "Government Savings Plan"

Many taxpayers anticipate their tax returns anxiously, but what if you didn't have to wait? What if you always had that money on hand to save, invest, or spend?

Invest your funds, and you'll get a return and make more money instead of just letting the IRS borrow it (again, might I add, interest free!)

Without Enough. No Less, No More.

If you're a W-2 wage earner like most, talk with your payroll department to adjust your withholding so you're paying just enough. You should be covering the minimum amount you'd need to pay to the IRS to avoid IRS interest and penalties.

Check out Jeff Schnepper's article to learn how to avoid interest and penalties, and what you should do to avoid tax refunds when you are making estimated tax payments, if you make over $150,000, or if you're paying through withholdings.

Remember… withhold just enough. Don't let the IRS save money for you: do it yourself. Invest it yourself. Try it this year, you'll see how nice it is to earn a little more with each paycheck.

Don't Let Yourself Owe $637K like Jaime Pressly

"My Name is Earl" movie  star Jaime Pressly is yet another celebrity joining the long list of IRS offenders. She' owes more than $637,000 in state and federal taxes.

The Debt: The IRS filed a $260,370 tax lien on December 6 against the Jaime Pressly, the State of California would also file a $281,699 tax lien in Los Angeles. 

Jail Time: Jaime Pressly was in jail, but not for her taxes. she was arrested on suspicion of drunk driving. She's current on a $15,000 bail.

Seriously Bad Month: So in one month Jaime Pressly was arrested for allegedly driving under the influence, had a monumental tax lien filed against her, and is divorcing her husband, entertainment lawyer Simran Singh. It just goes to show you:

- Tax debt will catch up with you, typically without warning

- You can be married to a lawyer, hell, or even be a lawyer and still wind up with big tax troubles

- Tax debt is often followed by divorce

- Tax debt will happen to anyone. If you owe, the IRS will find you.

It's hard to stay caught up with all of the celebrity tax offenders the IRS nailing lately. Anyone who owes needs to take this as a sign, get caught on tax filing for 2011 and get to work taking care of your tax debt. If it hasn't caught up with you yet; it will.

Tax Refund Delay While the IRS Plays Catch-Up

For the early birds who love to file as soon as they have their W-2s in-hand, sorry, you might have to wait. Congress too long passing legislation affecting 2010 taxes and now the IRS is catching up.

Here are the folks who are more likely to be affected by the delay:

- Taxpayers who itemize or fill out Schedule A
- Taxpayers looking to deduct mortgage interest
- Educators paying out of pocket
- Anyone paying for post-secondary school (include people who paid for college last year)

Many others should be able to file by the end of this month.The little wait will be worth it in the end, it may even put more money in your pocket when you get your tax refund.

Lil Jon Owes the IRS More Than $600K in Back Taxes: WHAT?!

Brace yourselves for shocking tax news: another celebrity owes the IRS! Infamous Atlanta music producer and musician owes the IRS more than $600K in back taxes.

According to a report by The Detroit News, The IRS filed a $638,937 tax lien against Lil Jon, listing a $1.9 million oceanfront South Carolina home as his address. Paper reports show the home was foreclosed on and sold in August 2010.

Ironically, Lil Jon is scheduled to co-star in a new season of Donald Trump's "Celebrity Apprentice". His co-stars are also facing numerous tax debts and troubles.

His debt co-conspirators include Jose Canseco ($320K in delinquent California state taxes), "Survivor" winner Richard Hatch (famously didn't pay taxes on his $1 million prize money for the show), Dionne Warwick, Star Jones, LaToya Jackson, and Gary Busey.

I think Dave Chapelle Says it best in his interperation of Lil Jon, "WHAT?" (But I'll add, "WHAT... the %^&* is going on, all of you need to hire a ^&*! accountant!")

Estimated Tax Payments Are Due...NOW!

After a long holiday weekend, here's some scary tax news to strike and shatter your fresh back-to-work attitude like a sledgehammer.

Sorry, but you're Estimated tax payments are due today. You can pay electronically if you have an account or you can pay with your credit/debit card.

If you still use the old snail mail method, send in your 1040-ES voucher and postmark your check for today. Use whatever means you want to pay, but make sure you pay on time!

Tax Trivia Giveaway: Free Tax Filing Software

The TaxGirl is currently hosting a generous Free Tax Filing Software Giveaway that I wanted to share with you guys.

Here's how to enter:

- Check her blog daily, she will randomly post a trivia question

- When you see a giveaway trivia question, leave a comment with your answer

- The first comment with the correct answer will be selected as the winner

- As Tax Girl put it, "Like Judge Judy, my ruling is final."

She will be posting 15 questions, so there's plenty of chances to win the free tax filing software. Give it a try!

The Top 5 Ways to Save on 2010 Tax Filings

Now is the time to get started with your tax filings. Start early, file smart, and you're sure to save money when you file your 2010 taxes.

1. Be Prepared

Take time to get your vital documents together. Hunt down documents like your W-2 and 1099 statements now, not later.

2. Start Now

I've giving you early warning, there's really no excuse not to get started now. Prices on tax filing software will go up the closer we get to the tax filing deadline. Get started now and you'll save.

3. Take Advantage of Deductions

Do your research and claim every deduction that you can. Don't go crazy claiming deductions you don't qualify for, but it will pay to search for deductions that work for you. Make sure you have the necessary paperwork and receipts to claim your deductions.

4. Get Help if Needed

If filing your taxes is more than you can handle, get help. Use a tax program or a reliable professional, either way, just don't do this alone. A tax professional or program finds deductions you didn't even know you qualified for and save you more in the long run. 

5. Take Advantage of E-File

Without tax forms going out this year, many people will e-file their returns. There are many free e-filing options that will help you save money when you file this year.

Another perk, short wait. Your funds will be deposited into your bank account in eight days or less.

Check our these IRS approved E-File Options.

5 Tax Resolutions: Start The 2011 Tax Year Right

It's a new year, a second chance to reach your financial goals. Use these 5 tax tips to start the near year with a clean slate. You'll avoid tax problems, and take care of existing ones.

1. Double Check Your Federal Income Tax Withholding

One of the top reasons taxpayers will owe the IRS is because they didn't withhold enough funds for federal taxes. If you owed taxes last time you filed, go to your payroll office or talk with you accountant to correct the issue.

Do it Yourself: Use IRS Form W-4, Employee's Withholding Allowance Certificate to make changes to your existing exemptions to tax.

For detailed instructions on how and when to change your W-4, see the article Federal Tax Withholding Requirements for Wage Earning and Self-Employed Taxpayers.

2. Start making Estimated Tax Payments

It's hard to pay your own taxes when you're self-employed, you don't have an employer doing it for you. Do yourself a favor and start the year off making your required estimated tax payments.  You should pay estimated tax payments if the following rules apply to you:

-If, after subtracting any credits you are eligible for along with any federal withholding from any other income sources, you expect to owe at least $1,000 in tax, and…

-The credits and withholdings are less than 90% of your current tax due or 100% of the tax due on your previous year return,

These rules are general and each taxpayer's situation is unique. If you feel unsure, consult with a tax professional.

3. Keep your financial files in order

Start now and it will be easy for the rest of the year. Keep all of your important tax documents and financial documents nearly filed away and you'll pay your taxes on time and be ready in the event of an IRS audit.

4. File and pay on time

Do not put this off anymore. If you owe the IRS, get to work with a professional to take care of this problem ASAP. Get compliant and file any unfiled years. If you're up-to-date on tax filings, keep up the good record and file on time this year. Nothing will screw up your financial life more than having your taxes unpaid.

Excellent Financial Tips for the New Year

I'm in the process of compiling some of the best financial guides on the web. I find that people who owe the IRS typically have a chaotic financial life in general, and I want people to see 2011 as a fresh new year to get those problems under control.

Check out Get Rich Slowly's guide on How to Take Control of Your Finances in 2011. This one covers nearly all of the bases for those who want to start 2011 right financially.