A very wise man, Daisaku Ikeda, once said, “Differences among people are a given. This is what makes each person unique and our world such a richly diverse place, resembling a garden in which many kinds of flowers bloom in profusion.” read more
If you have put off filing your taxes because you owe money – don’t. Its OK to file an extension, IRS Form 4868 by the due date of your return, but all the taxes owed Uncle Sam are due by April 15th. The simple act of filing your return, even without full payment, can save late-filing penalties.
If you let those taxes go unpaid too long, you can expect escalating penalties, risk having your income garnisheed, liens placed against your assets, and even seizure and sale of your property down the road. Tax nightmares can be avoided though.
If you think you can cover the bill in the next 45 to 60 days, simply pay as much as you can when you file the return. The bill the IRS will send you a bill for the remainder. Hopefully, you can payoff the bill when it arrives. The IRS will bug you 2 or 3 times before they strong arm you. Expect some interest and penalties but you’ll avoid additional IRS paperwork.
The IRS will accept credit card payment through a third party provider. [Website: www.pay1040.com or www.officialpayments.com]. There is a transaction fee when you pay by credit card. When you make a credit card purchase at the store, the store pays a transaction fee based on the dollar amount you charge. The IRS, unlike the store merchant, does not pay a transaction fee, instead you do.
You can pay your taxes in monthly installments through an installment agreement – IRS Form 9465. You will be required to pay a “user fee” of $105 (or $52 if you can electronic fund the withdrawals) to obtain the installment agreement. There is still a monthly late-payment penalty of .25% of your balance. But an installment agreement is still better than ignoring your obligation.
This is not easy to get. You have to prove that you can’t sell assets and/or borrow to pay your taxes, except under terms that would cause severe loss and undue hardship. There are additional documents where you will have to provide statements of assets, liabilities, income and expenses, IRS Form 1127.
Family, friends, or a bank loan come to mind. Banks are often easier to deal with than an IRS agent. I see an awful lot of people borrow from retirement savings. Just be careful and know that if you fail to repay retirement savings, you could trigger additional taxes and 10% penalty on top of the taxes.
It’s not fun to pay taxes but it’s less fun to deal with the mounting penalties, interest and notices later. Don’t let the situation get bigger and snow ball out of control. Tackle the issue head-on and handle the taxes with a solution.
“The important thing is not whether we are optimistic or pessimistic but rather that, while keeping a careful eye on reality, we are neither overwhelmed by it nor content with the status quo. We must keep the lamps of our ideals alight while being ready to pioneer uncharted paths. Faith in life and in the human spirit is the necessary foundation for this approach.”
How true this rings today! This is a from the Buddhist Wisdom for Modern Life. It is indeed the human spirit that pioneers uncharted paths and finds solutions to what ails us. We must all keep that careful eye on reality. I heard yesterday that a popular trend upon college students is studying economics. The classes are full at many universities and not for the reasons you might expect. Unlike their predecessor, these new students want to understand what happened to get us where we are today – not for high paying jobs on wall street (those jobs are gone).
Let’s move forward with a “careful eye on reality”.
House Hunting in a Poor Housing Market
I had been thinking about purchasing a house for almost a year. I was tired of moving around and wasting my money so that someone else could own an apartment complex or a duplex. If my monthly rent payments were covering the costs of the landlord’s mortgage, interest, and taxes, why couldn’t they cover mine? So I went to the bank with all of my paperwork to see about buying a home.
The banker told me that my credit was impeccable and I made enough money that I could get a good sized loan all by myself. Excited to hear this, I thought adding my husband and his income into the equation would allow us to buy the perfect house. Unfortunately, my husband’s credit was horrible. We had been working on improving it eight months prior, but it takes years for it to go from what it was to being great. Adding him on to the loan would have left us with the same loan amount and a HIGHER interest rate. I decided to go in on it alone.
After figuring out what we could afford to pay per month on a house, I determined that the loan amount that we could afford was less than what I was eligible to receive. Thinking that it was no big deal, I began my house hunting. I made a mental note of all of our requirements for a house: location, three bedrooms, basement, two stories, garage, nice yard, etc. I searched the real estate websites every day, hoping that our dream house would be in reach. I was kidding myself. With the housing market plummeting, no one wants to sell their house – especially a “perfect” house for next to no money. If I wanted a house, it had to be a foreclosure.
I scoured the County Sheriff’s website for houses that were going up for foreclosure in my location. There weren’t many, but there were enough to give me some hope. I made a list of all of the ones within our price range and drove around to find them. The thing with these types of houses is that you can see the outside and think you are getting a good deal, but really, you have no idea what you’re in for because you can’t assess the inside until you purchase the house. However, about half way down my list, I spotted a house that was actually for sale through a realtor. The owners were trying to sell it before it went to auction. It was a great looking house in the right location AND I got to see it before it went to auction. What luck!
My family and I viewed the house numerous times and we all agreed that it would be an amazing investment. It wasn’t quite everything that we wanted (it didn’t have a garage), but we were willing to compromise. The asking price for the house was outrageous, but we knew it was going to auction in a few months at 1/3 that value. So, we put in an offer of 1/3 the asking price. The realtor said no way, even knowing about the foreclosure. After covering all the bases and hitting all the angles, we weren’t able to get the house.
I was so upset and tired of the hassle of looking for a house that I gave up. I felt like we were never going to get the home that we wanted. Then one day someone told me about the first-time home buyer credit. Even though we had been looking for a house for over six months, we had never heard about it before. In 2008, the government decided to give first-time home buyers a credit if they purchased their house between April 9, 2008 and July 1, 2009. The credit was essentially an interest free loan from the government that could be paid back over the course of 15 years. This information recharged my motivation and I started my search again.
Knowing how long it takes to find a house and close on it made me nervous that I might miss the deadline. I looked at all of the same websites as before, drove up and down streets to see if there were any houses for sale by owner, and even asked a realtor to help with the search. There were a few houses that I looked at, but none were what we wanted. Months went by. The fact that it was 2009 already scared me even more. We were going to miss out on this credit and we would still be wasting money on rent.
When I thought all hope was lost, a house that I hadn’t seen before came onto the market. It had been a foreclosed home that a bank bought. It was small, but was listed to have everything else we wanted. At that point, I thought, why not? We won’t lose anything by checking it out.
There was a lot of work that needed to be done to it, but as I said, it met most of the requirements on our list. Plus, we knew that we would need to get a “fixer-upper” because of our financial situation. I gave my family a tour of the house to get their approval before making an offer. They agreed with my opinion that it would be a good buy for us.
After weeks of negotiations, we were disappointed again. The selling bank said that they weren’t going to accept the type of loan that we were going to use. However, I was not going to let this house slip through my fingers like the other one. I knew that we could get this house. It was by no means a stretch for us and I was determined to find a way. I went back to my banker and we made a game plan. We presented it to the seller and within a day, they accepted our offer.
Shortly after the acceptance, I heard that the American Recovery and Reinvestment Act of 2009 was going into affect. This act changed the first-time home buyer credit by eliminating the repayment obligation, increasing the maximum payout, and changing the start and ending dates. My luck was turning around.
The moral of my story is to not give up. It took us almost a year to purchase a house and we finally made it. If you are determined, things will eventually fall into place. I also want to point out that purchasing a home right now might be more difficult than a few years ago, but you can still find a few gems. Keep looking and take advantage of the credits the government is handing out. I’ll be writing another blog soon about the energy efficiency credits that are in effect for 2009.
The great German author Johann Wolfgang van Geothe wrote: “How can [one] learn to know [oneself]? Never through contemplation but very likely through action. Seek to do your duty, and as soon, you will know your worth.”
I ran across this while reading my morning inspiration from World Tribune and felt compelled to share. It wasn’t until I started taking actions to move myself forward that I found value in myself and my desire to inspire others to move forward. “Actions reveal a person’s true worth; they let a person know the truth about themselves.” – as written by one of my favorite authors, Ikeda. Action – that one step forward.
“Always speak the truth boldly, saying what needs to be said no matter whom you’re addressing. When it comes to championing a just cause, you must never be cowardly, never fawn, never try to curry favor.” – Daisaku Ikeda
I don’t watch much TV but managed to catch part of what I think was Date Line NBC last night. They hired actors to simulate a guy spiking a woman’s drink while bystanders watched. The camera rolled as the male actor poured sugar into a female’s wine glass when she went to the lady’s room. Always the camera panned out to catch the deed and at least one on-looker.
Me and my husband rooted for the bystanders to “do the right thing“; to speak up and either confront the predator or at the very least warn the woman of the danger. Surprising most people did nothing. Not a very brave act.
But two witnesses to the crime (the crime of drugging another human to take unfair advantage of them) spoke up and were credited with being heroes. I was surprised that only two people did the right thing of all those filmed.
It made me think about where we are as people, that so many would not speak up. I believe speaking up at the right time for the right reason is important in every part of life – in business, in the community, and sometime the tough loved needed between caring family and friends.
What would you do?
An accounting firm has always been one of my ideal places in which to work and now I am working at Better Financial Solutions, a CPA firm. I am very excited that I actually get to experience working in my ideal job as a high school student. I have been working in Better Financial Solution for a little more than four months now. Although my work hours are less since school started at the end of August, I have always looked forward to coming to work and like the variations. Working at Better Financial Solutions, I have learned so many things.
Some people might think working in an office is boring, but I find it enjoyable. Marie Cutlip, a CPA of this firm, has taught me a lot about accounting and business. Working with a variety of industries and accounts, preparing tax return support, and doing office work are actually quite fun.
It is fascinating to work on accounts and to see the flow of money going in and out on a daily basis. Every single transaction that the businesses make are recorded. As I am taking an accounting class in school, it helps me greatly to do well at work and to understand better about what I am doing. Also when I am in my accounting class, I find it interesting to learn more about the things that I have already learned at work. I feel that I already have a great start with pursuing my career in this field.
Great things are achieved through the steady accumulation of many inconspicuous small actions.” - Ikeda
