The IRS has stated that the agency is “working quickly to resolve this issue and update its systems….which will allow the correct processing of these impacted returns.” Anyone who is claiming the final and most generous (in terms of qualification) installment of the tax credit on a home purchased in 2010 shouldn’t be affected by the errors according to the IRS.

$250 SSI payment and Making Work Pay tax credit over-payments for working seniors

The Senior Citizens League also reports that millions of Americans may be in for an unpleasant surprise during tax season because the Making Work Pay tax credit was incorrectly applied to an estimated 13 million taxpayers in 2010, many of them seniors. This potentially leaves many retirees unexpectedly owing hundreds of dollars in taxes, and in some cases paying penalties for last year.

The $400 making work pay tax credit  was advanced to working taxpayers in 2009 and 2010 in the form of higher payroll and pension checks (via lower federal income tax withholdings deductions).  Seniors who received the Social Security, Supplemental Security Income (SSI), railroad retirement or veterans’ disability compensation also qualified for a separate one-time $250 payment. Working seniors who qualified for the tax credit and SSI payment had to reduce the larger making work pay credit by the SSI amount of $250, making them only eligible for a $150 making work pay tax credit. But the IRS withholding tables used by employers did not adjust for those payments and so many seniors received $650 ($400 + $250) instead of the $400 ($250 + $150) that they should have.

Seniors receiving pensions were affected as well, because the IRS tables allowed reduced withholdings for pensions — even though such income was not even eligible for the credit, which only applied to income earned from a job. Married couples who worked and also received a pension are at greatest risk and could potentially owe as much as $1,600 if they are not eligible for any of the credits (due to income limits)

Because the faulty tax tables caused many people to owe taxes they didn’t expect to owe, the IRS allowed penalties to be waived for the 2009 and 2010 tax years. But the waivers are only given if taxpayers explicitly request them. According to the Treasury Inspector General, last year virtually no taxpayer surveyed knew they could request a waiver.

“Many seniors will be surprised to find they owe money on their tax returns for 2010 because of the way the IRS implemented the Making Work Pay tax credit,” said Larry Hyland, chairman of The Senior Citizens League. “We urge affected seniors to file their penalty waivers. We also urge the government to eliminate what amounts to double taxation of Social Security benefits, by removing taxes on those benefits.”

Feel free to leave a comment below for any issues you have had claiming any of the above or other economic stimulus credits.

Source: PR Newswire

The truth is that most people today spend more time planning a two week vacation than they spend planning their retirement. And, oftentimes people will put their life savings in the hands of a total stranger they picked from a Yellow Pages ad because they simply don’t know how to research financial planners. And, this could prove to be a big mistake.

Although there are no iron clad guarantees, there are some questions you need to ask any financial advisor you are considering placing your money with. After all, this is the money you plan to live on for 20, 30, or more years! So this is a job that you definitely want done right.

Some experts have even likened picking a financial planner to hiring somebody for a job. And this makes a lot of sense. This person will be dealing with the business of your finances – so you will definitely need to hire the right person for the job.

Some of the most important questions you will need answers to include:

• What is your experience? Today, just about anybody can call themselves a financial professional. But where the rubber meets the road is whether or not the person is truly qualified to give good, knowledgeable financial advice. Therefore, inquire as to what licenses and other qualifications they possess such as professional or industry designations like a Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC). You should also ask how long they have been in the financial services industry. Because, while it’s nice to give everyone a chance, you will likely be much more secure with an experienced professional who has worked in both up and down markets successfully.
• How do you get paid? This is a biggie because an advisor’s pay source may have more to do with his or her recommendations than you think. There are numerous types of compensation structures in the financial services industry. The advisor could be paid on commission, a flat fee, an hourly rate, or a combination of any or all of these. Be sure to inquire as to any conflicts of interest as well. For example, if a financial services representative is paid on commission and they only offer a limited number or types of  products, then this could be a red flag as to where their true interests lie. Search here for a list of local, pre-screened fee-based financial planners to match your needs.
• What is your track record? There are actually a variety of ways to evaluate an advisor’s track record. One such method is to simply inquire as to how many clients’ portfolios are performing in line with or better than their goals. Include both short and long term goals in this conversation. In addition to investment performance, you will also want to know their track record in terms of any disciplinary actions for unlawful or unethical actions in their professional career. If the advisor is registered with the United States Securities and Exchange Commission, then you can actually look up this information online
• Can I get it in writing? Once you feel comfortable with an advisor, ask them if you can have an agreement in writing that will detail the services that they will provide for you as well as the fees that you will be paying them for those services. Information in this document should include their investing strategies, specific benchmarks for performance, and suggested products to help get you there. And, always keep this document in your files for reference.

Regardless of how well your relationship is with your financial advisor, always keep in mind that it is you who is ultimately responsible for your money. You may not be at the helm making every trade, but you are responsible for ensuring that your advisor works in your best interests and that they handle your finances properly.

So I called the towing company and sure enough they had my car. I tried to tell the company that I had legally parked, but could not negotiate with them since they said they were just working on the apartment management group’s instructions. Also, typical of most towing companies who rarely need to worry about customer service or satisfaction, they were rude and offered little in terms of recourse to resolve my situation. Given I needed the car for getting to work the next day, I went with one of friends to pick it up. After paying the $150 towing charge I was able to retrieve my car, but suffice to say I was not a happy camper.

I had definitely parked in a spot that was not reserved with no signs indicating visitor parking was not allowed; and my friends were pretty sure that when they signed the lease there were no parking restriction in non-reserved visitor spaces.  In fact they had parked, without tags or permits, in similar spots to mine over the last 2 weeks and never got towed. So after venting for a few days, I decided to look at my state’s towing laws, what rights I had and what people in situations similar to mine had done. Here’s a summary of what I found and things to keep in mind.

Check you did not violate parking rules : The first thing to check is that you parked in a legal spot. Make sure that there is no signage at the entry to the parking lot or in nearby spots that indicates you could be illegally parked. If possible check the lease of the person who is renting the apartment, which should state parking restrictions and visitor parking in the apartment complex. Finally call the apartment managers to log a complaint and ask them why your car was towed. They will likely be more helpful than the towing company, particular since they have to care about their tenant’s rights (like having visitors be able to park when they come over).

Proof of the towing: Get proof that the towing company followed state procedures regarding the towing. This requires that they take a picture of the car in the “illegal” spot and notify the local police department to ensure the car is not classified as stolen. Getting the pictures of the towing from the towing company is not easy and you will likely have to go back a couple of days later to get the digital photos. Expect a charge for this.

Call the local police department: You should also call the local police department where the towing company is located to check it they actually reported your car as towed. The police though cannot force the towing company to give back your car and can only come out to keep the peace if discussions get heated and act as a witness. However, don’t expect the police department to be much of an ally since this is a pretty minor item in their eyes and they have much more of a relationship with the towing company operators, than with you.

Don’t be a hero: The number one mistake victims make is to take matters into their own hands by taking aggressive actions with the towing company. By doing that you make the other person (i.e the towing company)  the victim and you become the criminal. If you go to jail the tow company wins. So work with or through the police to make the initial complaint. Then follow local procedures to take the matter further if discussions with the towing company and apartment managers cannot resolve the dispute.

Predatory towing  is real: Once a towing company has a vehicle, they impound the vehicle and refuse to release it until a desired fee is paid. If the fee is not paid, the vehicle is not released, and storage fees begin to accrue until the surpass the value of the vehicle. At some point, the towing company will auction off the vehicle and keep their towing and storage fees. The typical vehicle owner does not understand the laws enacted to protect them, do not have sufficient vacation time to try to enforce them in local courts against an experienced attorney representing the towing company, and can’t get the local police to help protect their rights because the police are not familiar with this area of law.

Legal rights and local laws: Most states have towing laws that are supported by the auto insurance industry as well as consumer and government groups to prevent increased insurance costs due to negligent towing by towing operators, protect vehicle owners from abusive practices, and to help regulate towing companies. Most local governments have also passed predatory towing laws to help consumers. All they need to to do is spend some time searching for them.

For example in California, under vehicle code 22658 a tow company can not tow your car from private property with 15 or more units based on a blanket authorization order from the landlord or association. In other words a towing company operating in the State of California can’t just drive through a complex looking for cars to tow in the middle of the night. Someone has to call them. The person who calls them must be present at the time the car is being towed. They must tell the tow company why the car is being towed. They have to point out the car being towed. The have to sign the authorization papers at the time the car is being towed and give their complete name, address and phone number.

Many other states  have also passed similar laws to prevent abuses by towing operators during towing from private property. This includes maximum fees ranging from $125 to $250 and requiring towing operators to release vehicles about to be towed if the owner arrives. Apartment managers must also display proper signage at entrances are around parking areas giving certain notifying information to vehicle owners about parking restrictions, maximum allowed fees for towing and storage. A little known rule, which most people don’t realize and towing companies ignore is that no towing fee may be charged for the first 24 hours of storage. Further, towing companies must accept credit card payments and not restrict payments to cash only.

Next steps: Unfortunately I needed my car back and already paid the towing fine. But with an understanding of the law, I am going to go after the towing company and apartment complex managers to try and get my money back. Remember knowledge is power. If your car is towed you need to know the law to take the appropriate course of action.

I’ll let you know what happens with my efforts to get the $150 of towing charges back. Feel free to leave a comment or any advice if you have had a similar experience.

References: Yahoo/AC, Wikibin

These websites will often use social media channels like Facebook and Twitter to help people find deals that are of interest to them in their local area. The interested individuals can then recommend and share these deals with their own group of friends and contacts, thus spreading the word exponentially.

Although not the only companies that are specializing in coupons or money saving deals, two of the most popular coupon sites are Groupon and LivingSocial. Both of these companies are busy raising funds in order to expand, and both companies make very good use of social media marketing features.

How You Can Benefit From These Social Media Coupon Websites

Groupon is probably the best known and largest social media coupon site and consistently offers great deals on a wide variety of products and services that are sold in the website visitor’s local area. These deals are available in over 500 markets and in 44 different countries – so the extent of where to use the deals found on Groupon is enormous.

By taking advantage of “collective buying power,” Groupon is able to obtain great discounts from the featured businesses and pass these savings along to the customer. And, it’s easy to get started with using the deals quickly. Site users simply sign up at Groupon.com and register for their local region. Then, the user will begin receiving regular emails showing them the local deal of the day. For example, a local sushi restaurant may show a deal where the Groupon user can pay $10 but actually receive $25 worth of sushi at the restaurant.

There is a minimum number of people that have to buy into the deal in order to receive the savings. But once the group is “on,” then the deal will stay active for a period of 24 hours, or until the event sells out. Given the number of people that use Groupon now, most deals get activated.

Grouponing is a great way to save money and allow yourself to try new places! But, there are even more benefits to Groupon than just savings. You can actually earn credits for deals as well. In this case, if somebody that you refer to Groupon subscribes to the site within 72 hours of your referral, then you will receive a $10 credit whenever that person makes their first purchase. So, sign up for your free Groupon account and see the savings and the credits can really begin to add up!

LivingSocial is another great website that offers similar types of savings and credits through social media. This site also posts some great deals from local businesses in the user’s area. Each day, LivingSocial has one great deal. Once posted, all the user needs to do is click to purchase the deal and they will receive a voucher for it the following day.

In addition to the savings component, there is also a way to share the link to the deal with your friends. And, if three friends also purchase the deal from the link that was shared, then you receive the deal for free! Here again, both savings and credits can help you obtain a huge variety of products and services for much less than list price.

Using Social Media

While other coupon related pages are marketing on social media sites like Facebook, Groupon and LivingSocial offer the easiest ways for users to not only see and purchase great deals, but also provide incentives to these individuals to share the deals with their own group of Facebook friends.

In addition, there are now iPhone apps that provide coupons for deals directly to peoples’ cell phones. And often this marketing is taken even one step further in that the deals are sent for the locations in the phone user’s local area.

Everyone is looking for ways to save money – especially in today’s tough economy. Groupon and LivingSocial have truly helped make this happen for people – while also providing people a way to earn additional credits on deals at the same time.

In some cases, insufficient retirement savings is not necessarily a case of not putting enough aside, but more so a result of the market fluctuations over the past few years that have left many without the nest egg that they had worked so hard to build. Of the many factors affecting why most people cannot retire at age 62, the top reasons include:

• They cannot afford to do so. It is estimated that most retirees will need between 60 and 70 percent of their pre-retirement income in order to retire comfortably. But, due to market conditions, as well as health and longevity factors making your time in retirement longer, many people simply do not have enough stashed away to carry them through if they retire at 62.

• They have had the value of their home decline which has reduced their net worth. Many retirees in the past have had the advantage of living in a debt free home during their retirement years. And, those who have a great deal of equity in their homes have also been able in the past to take advantage of a reverse mortgage – thus, helping to boost their retirement income. Today, however, with the sharp decline in real estate values, millions of retirees will not only be unable to use this option, but most will still have a house payment as well.

• They have had to use some amount of their retirement savings for emergencies or other purposes. Due to job loss or other factors, more and more people have had to dip into the savings that was earmarked for retirement to get them though a current situation. Not only do they lose the benefit of compounding on these funds, they most likely have to pay back-taxes on these hardship withdrawals.

• They do not recognize the impact of inflation. Inflation can be considered the “silent killer.” Even those who have saved for retirement may not have factored in the rising cost of living – as well as the continued rising cost of living that they will incur throughout their retirement years. Stamps are no longer just 27 cents – so people need to be sure that they will have enough retirement savings to not only get them through today’s expenses, but tomorrow’s expenses as well.

• They will pay too much in taxes. Here is where it is extremely important to have an actual retirement plan. Saving for retirement means not only having enough in your portfolio, but also protecting as much of that as you can from taxes. We’ve all heard the phrase, “It’s not what you make, it’s what you keep that counts.” One wrong decision and you could end up losing close to half of your retirement savings to Uncle Sam.

• Many people simply procrastinate. Even though most people understand the importance of saving for retirement, they don’t always understand the ramifications of waiting to start doing so. But, using the power of compounding, the earlier you begin can help you to really get a head start. And over time, the funds can grow substantially, even if you are earning lower than average returns.

Rather than look at the above list in despair use it as a call to action and realize that like the average American, you will not be able to retire in your 60′s. But while working to 70 may be the new reality, you better start saving for retirement now, or you could literally become a working stiff. Even with the ability to only make small contributions, every little bit counts. Your savings of any amount could mean the difference between working indefinitely or enjoying some aspects of a retirement lifestyle.

Simply put inflation is a rise in the cost of stuff – your stuff, the nation’s stuff, and the world’s stuff – and much like your egotistical friend, it’s not a welcome sight. In order to keep up with inflation, one of two things would have to happen: either your employer has to give you a raise or the value of a dollar has to rise to account for rising import prices. As you know, neither of those happen very often.  But there is a third way to deal, and even profit, from inflation. Invest in it. Here are three ways to so:

Inflationary Bank Products

Not all bank products will work to profit from inflation but there are some that allow you to use it to your advantage. According to the Wall Street Journal, some money market mutual funds are attractive in inflationary environments because they invest in products that mature in 30 to 40 days. If that seems a little foreign to you, the more often a fixed rate investment matures, the more your (or the fund that you’re invested in) opportunity to shop around for new rates that may be more in line with market conditions.

There are also products specifically tailored to investors who believe that the rate of inflation will rise. One example is a certificate of deposit that has varying interest rates. At the beginning of the CD period, the rate may be 2%. 3 years later, 4%, and by the time the CD matures, it may 5.25% or higher. While this type of CD laddering approach may seem like a sure way to profit, be wary of banks often give themselves the option to call the CD at certain time periods. This could leave the investor out in the cold if inflation falls making interest rates fall. See more on CD laddering.

Bonds

When you invest in a bond, you are a loaning a company, municipality, or the Federal government money in exchange for a set rate of return (coupon or yield). Although yields are constantly changing, the average consumer doesn’t buy and sell bonds frequently on the open market. For that reason, bonds should be seen as fixed income investments.

One type of bond that is specifically tailored toward profiting from rising inflation is TIPS. Treasury inflation-protected securities (TIPS)  are essentially government-issued bonds whose principal grows with rising inflation and pay a fixed interest rate every six months, known as a “coupon,” similar to ordinary Treasury’s. But unlike Treasury’s, TIPS are indexed against the Labor Department’s consumer price index (CPI). So when CPI – the measure of inflation – rises, the coupon payments of TIPS and the underlying principal automatically increase. Conversely, With a fall in the index, or deflation, the principal decreases. But rather than actual inflation, it is the expectation on inflation that drives the demand and price for TIPS. Such expectations could drive TIPS prices higher, thereby shrinking yields, since price and yield move inversely for bond securities.

Commodities

Commodity prices tend to rise with inflation because they are in limited supply and are easier to pass to downstream consumers. For example, when the price of basic groceries goes up it is generally because the cost of raw materials that go into production of these items rose. But buying the physical commodity behind most goods is not practical for most people. Fortunately there are many practical ways to invest in commodities through stocks, ETFs or mutual funds.

Where to invest? First, invest in agriculture companies or funds (see Morningstar for a list of relevant funds). This includes seed and fertilizer companies, agriculture machinery companies, and companies who manufacture food. Food or other soft commodities like cotton and sugar, aren’t the only area to think about. Use exchange traded funds to invest in hard commodities like oil, gold, and other metals. If you think energy or gold prices are rising, then invest in a fund that owns these assets.

Bottom Line

While inflation is still at historically low levels (around 1.5%), there is little doubt it is rising (just look at rising gas and food prices). So rather than wait to deal with higher prices take the smarter approach by saving and investing in an economy where real inflation is just around the corner

Obama’s 2011 Deficit Reduction plan is based on 4 key items aimed at reducing the deficits by $4 trillion over 12 years (vs Republican proposed cuts of $5.8 trillion over 10 years), with $3 trillion coming from spending reductions and $1 trillion from tax reform. In particular:

- Cut domestic discretionary spending by reducing spending on various federally funded programs.

- Reduce the defense budget by $400 billion through eliminating obsolete programs (like a number of fighter jet development programs)

- Tax Cuts: Administration officials confirmed that the president will renew his call to end the Bush-era tax cuts for families making over $250,000 a year, a proposal that Republicans fiercely opposed. “The most fortunate among us can afford to pay a little more. I [and Warren Buffet] don’t need another tax cut [at the expense of medicare for seniors]” Obama said during his press conference. He also pushed for corporate tax reform by proposing to cut the corporate tax rate, while eliminating other loopholes.

- Medicare: Control entitlement spending on such programs as Medicare and Medicaid that provide health care for 30% of Americans. Obama is aiming to cut more than $300 billion in savings from Medicare and Medicaid programs over the next decade. Unlike the Republicans proposal which makes much larger cuts – $771 billion from Medicaid over 10 years – Obama does not want to push seniors to purchase government-subsidized insurance.

The President positioned his debt reduction plan as a more “compassionate” alternative to one introduced last week by Ryan. He applauded Republicans for putting a plan on the table to address entitlements, but the praise stopped there.

“The way this plan achieves those goals would lead to a fundamentally different America than the one we’ve known certainly in my lifetime,” Obama said, calling the GOP plan “deeply pessimistic.” He suggested Republicans were giving up on basic functions of government.

“It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them,” Obama said of the Republican plan. “It’s a vision that says America can’t afford to keep the promise we’ve made to care for our seniors.” (source: foxnews)

Obama’s deficit reduction proposal also calls for a “failsafe” trigger, which would apply across-the-board spending cuts if the national debt, as a percentage of GDP, is not on the decline by 2014. This would force Congress to act.

The President has appointed vice-president Joe Biden to lead a congressional effort to put together a bi-partisian plan to tackle the national debt. He wants to see concrete proposals by the end of June. I will provide more updates on these specifics and you can subscribe (free) via Email or RSS to get notified of the latest news.

Pros

On the positive side, paying off your mortgage leaves your lender with no claim to your property. This means that your home truly is yours. And, especially in today’s economy, alleviating the fear of foreclosure can be reason enough to pay off your home.

In addition, the sooner you get rid of your mortgage, the less in total interest you will have to pay. In fact, even making extra principal payments each and every month will save you thousands of dollars in interest over the life of your loan.

Of course, one of the biggest reasons people want to rid themselves of their mortgage is the freedom that it gives you. For example, owning your home outright could allow you to sell your property and purchase another one with cash. You could also use the funds that would have gone towards future mortgage payments and put them into savings or your 401K instead. And of course, along with fewer bills and more money in savings, you could even take early retirement now that your biggest monthly payment is gone.

Cons

Even with all of the benefits of paying off your mortgage, you should keep a few other factors in mind, such as the fact that when you no longer have a mortgage payment, you can no longer take the tax deductions that are allowed on the interest paid each year. And, for those taxpayers who itemize their deductions, this could essentially make a very big different in your tax situation.

Paying off your mortgage early could also represent lost opportunity cost. This means that, depending upon the interest rate on your loan, using the money you would have used to pay off the loan and placing it in other investments instead could provide you with a much better return on those dollars. In fact, in some cases, paying off your mortgage and giving up other investment opportunities could actually put you behind financially.

In addition, when you look at your overall spectrum of investments, you will want to make sure that you are properly diversified. Therefore, if you were to pay off your home early, you could be left with a large amount of your assets in real estate with very little elsewhere. This is particularly risky in a market where real estate prices are falling.

Final Considerations

In considering whether or not to pay off your mortgage, there are a few factors to think about that could help you in making your final decision. First, read over your mortgage statement and find out if there is a prepayment clause. If so, you could actually be penalized for paying off the loan early.

Also, the interest rate on your mortgage will have a lot to do with your decision. For example, it is much better to prepay a mortgage that has a higher interest rate. And, since the long term return on investment in the stock market has been in the neighborhood of 7 to 9 percent, it may be better to pay off or refinance your mortgage if your rate is above 6 percent. However, if your interest rate is below that, it could make more sense not to prepay.

Certainly your financial stability should also be a key factor in your mortgage prepayment decision. If, for instance, your current income or liquidity is unstable, then you may want to invest your funds rather than tying them all up in your home. This liquidity could offer you a financial cushion in case of an emergency.

Dave Ramsey –The Total Money Makeover & The Seven Baby Steps to Financial peace

Dave Ramsey is a big-time financial guru who has a loyal and enthusiastic following. Ramsey teaches consumers how to get out of debt in addition to offering investment advice and has much more of a “tough love” style when he does so (based on his own experiences a long time ago). For some, this approach is exactly what is needed, while it can rub others the wrong way.

Overall, Ramsey offers some good pointers, like his 7 baby steps to reach financial peace. However, when it comes to some of the sub-areas of personal finance, some believe that he does not have any business offering advice. For example, some of Ramsey’s strategies on IRAs leave a lot to be desired – like downplaying the impact or consequences of taxes.

In addition, some of Ramsey’s information on mutual funds and hedge funds may not be 100 percent accurate either. For instance, his discussion of mutual fund expense ratios is off a bit as is his definition of a hedge fund – leading some readers of his website to question his knowledge in this area.

In spite of this, for those truly wishing to get out of debt by following some basic steps, Dave Ramsey does have some helpful tips. In particular he offers folks a decent way to get started with a financial plan by ridding themselves of debts and other obligations that could be holding them back from financial freedom.

Suze Orman – The Money Class Book and The Suze Orman Show

Suze Orman has been touted by some as “America’s best known financial advisor.” She has supposedly helped millions of people, but it is questionable as to whether Orman has actually benefitted them financially in the long term.

On the positive side, Suze Orman’s outgoing personality style has helped many when it comes to actually facing up to the personal issues that surround money. For example, after listening to Orman, many people feel much more comfortable about investing and in facing their fears about making various financial moves.

However, when it comes to actual financial advice, Suze Orman has been considered a bit controversial in some areas. For example, she has been known to push for paying off your mortgage – even if it means excluding making investments in other areas. The result of this could leave investors with a huge chunk of their net worth in real estate and very little everywhere else – including an emergency fund.

In addition, she also errs on the conservative side. In fact, in her own personal portfolio, Orman admits to only having about 4 percent of her assets in the stock market with a large percentage of the rest in municipal bonds. And, while this strategy may be thought of as safe, it is not practical for the average investor who is hoping at the very least to beat inflation and grow their assets to keep their purchasing power in line with rising prices.

Conclusion

So, while financial gurus may provide advice that makes people feel good, the truth is that feeling good is not what makes your money grow. People need to receive their financial advice from those who have a good understanding and knowledge about their individual situation, financial habits and actual aspirations.

I would definitely recommend you consider what these gurus have to say, because you will soon realize that getting out of debt is not impossible and just requires some discipline and common sense. But don’t rush in and pay for all the extra services these gurus (and their companies/affiliates) try and up-sell to you, without assessing them thoroughly. After all in many cases, free advice is free for a reason.

I’ve filed, but where is my refund?

You can go online to check the status of your tax refund 72 hours after IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after you mail a paper return. Be sure to have a copy of your just filed tax return available because you will need to know your filing status, the first Social Security number shown on the return, and the exact whole-dollar amount of the refund. You have three options for checking on your refund:

- Go to irs.gov and click on “Where’s My Refund”
- Call 800-829-4477~24 hours a day, seven days a week, for automated refund information.
- Use IRS2Go. If you have a smart phone you can download an application to check the status of your refund.

What if I made a mistake on my tax return?

Mistakes are common, but the key is fixing them as soon as you discover them. If you find an error on your return, you can correct your return by filing an amended return using Form 1040X, Amended U.S. Individual Income Tax Return.

How to file a tax extension

The IRS says it received requests for 11 million extensions, which amounts to about 8% of all tax returns. Taxpayers who ask for an extension get an extra six months to file—your new deadline will be Oct. 18. You can get some extra time without any hassle. Simply e-file for a Personal Tax Extension of your federal tax return using TurboTax Easy Extension. You can also file for an extension on the IRS website.

Important things to remember when you request an extension

First, a federal extension does not automatically extend the deadline for your state income tax return. Also, an extension to file your federal taxes does not give you an extension to pay your actual tax bill. You still have to figure out your taxes and make an estimated payment. Estimating how much money you’re going to owe can take time, so please do not wait till the last minute until to get started. Last year’s tax return could be a good starting point if you haven’t experienced any major life changes. If that is the case, you can probably pay the same amount in taxes for the current year that you paid in the past year.

Don’t ignore the IRS if filing late or you owe more than you can pay

The key to surviving last-minute tax filing is realizing that the IRS will not be ignored. These guys aren’t kidding around when they set deadlines. The IRS wants your paperwork, and it wants it now. If you don’t file your return today and you owe taxes, you may owe an additional penalty for failure to file unless you can show reasonable cause. The assessment is 5 percent per month (or any part of a month, even just a day) of your balance due.

Even if you file on time but don’t pay what you owe, the IRS can charge you. This nonpayment penaltyis one-half of 1 percent of the tax due each month, or any part of a month, that isn’t paid. The fine continues until it reaches 25 percent of your late payment. If both penalties apply in any month, you get a small break on the failure-to-file penalty. The IRS will reduce it by what it’s charging you for not paying, making your potential maximum nonfiling penalty “only” 22.5 percent. (Read more: You must file something! Here’s how)

IRS Tax Installment plan

Hopefully by now you will realize that it is better to pay your taxes than avoid them. So if you are having troubles with finding the money to pay your taxes, consider an IRS monthly installment plan. You even get to pick your monthly payment amount and the day it will be due. In fact, if you’ve previously filed — and paid — taxes on time, your tax bill is less than $10,000 and you convince the IRS that you can’t come up with that much all at once, the agency can’t turn down your request. Your installment plan, however, must pay off the due tax in at least three years. To get the program going, attach Form 9465, Installment Agreement Request, to the front of your tax return. Financially strapped taxpayers also can use an installment plan to make partial payments of tax liability.

(See more IRS payment options)

References: IRS