What Will Happen If You Don't File Your Past Due Return or Contact the IRS

It's important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who don't file a past due return or contact the IRS are subject to the following:

• Penalties and Interest will be assessed and will increase the amount of tax due.
• The IRS will file a substitute return for you. But this return is based only on information the IRS has from other sources. Thus, if the IRS prepares this substitute return, it will not include any additional exemptions or expenses you may be entitled to and may overstate your real tax liability.
• Once the tax is assessed the IRS will start the collection process, which can include placing a levy on wages or bank accounts or filing a federal tax lien against your property.
• Even if the IRS has already filed a substitute return, it still makes sense for you to file your own return to make sure you take advantage of all the exemptions, credits, and deductions you are allowed. The IRS will generally adjust your account to reflect the correct figures.

If your issues are not addressed on this site, you can call the IRS toll-free at 1-800-829-1040, or visit tax topics.

What if I missed the April filing deadline?

If you're expecting a tax refund, there's no need to panic. You don't even need to file an extension.

2011 tax returns that are due a refund are given until April 15, 2015 (October 15, 2015 with an extension) to be filed with the IRS before the statute of limitations on the refund runs out. If you don't file by then, the U.S. Treasury simply keeps your "donation."

However, if you owe additional taxes, there is no statute of limitations. For this reason, try to file your income tax return as soon as you can. The longer you wait, the more interest and penalties are assessed on top of the money you already owe.

What to Do if You Can't Pay Your Federal or State Income Taxes

If you can't pay an unexpectedly large tax bill by the filing deadline, the IRS (and many states) will let you sign up for an installment plan. With an installment plan, you can pay off your taxes through regular payments, often via payroll deduction or by regularly scheduled debits from your bank account. File your return in a timely manner to minimize any additional penalties.

However, before requesting an installment agreement, you should consider other less costly alternatives, such as getting a bank loan or using available credit on a credit card. This is especially true if the interest and penalties imposed by the IRS would be more than the interest on your credit card or a bank loan.

Please note that installment plans do not waive additional costs associated with late tax payments, including:

• Interest on the remaining balance due;
• Late payment penalties and/or late filing penalties;
• Accumulated interest on unpaid late payment or late filing penalties.

Nevertheless, for some taxpayers, installment plans are a convenient way – sometimes the only way – to pay off overdue taxes.

Save Money Each Month

A penny saved isn't actually a penny earned. But every penny you don't spend can be a penny you put in your piggy bank. Here are some tips on ways you can save money each and every day, week and month.

• Use your public library. Books, magazines, audio books, films, and CDs are all available for no charge at your public library. Many libraries even offer free events, classes and workshops for children and adults. It is crazy not to take advantage of all that your library can provide. Do yourself a favor and go see what your library has to offer you.
• Look for free or inexpensive entertainment. Whether you are taking advantage of free movies in your local park or 'pay what you will' evenings at a museum, lowering the cost of keeping yourself entertained will up your savings total.
• Evaluate the money you spend on food. Are you spending more or less than average for your household? If you are spending more than average, coupons and sale items are a great place to start, but there are other options as well. Is there a food or cooking co-op you could join or organize? Would ordering your groceries online allow you to spend less? Are there any farmers markets you can take advantage of? Everyone has to spend money on food, but you can get creative to find ways to lower your costs.
• Shop for bargains. No matter what you are looking to purchase, there is probably an option online to find it. Remember to check websites such as Craigslist, auction sites and even Freecycle for products you need. Thrift stores, both online and traditional brick-and-mortar, also offer a lower cost on items from clothing and accessories to furniture and books.

You may not be able to reduce the cost of your mortgage or rent, but many of your other expenses can be tweaked to allow you to squeeze every last penny out of your budget.

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Staying Fiscally Wise When Renting An Apartment

Given the current state of the economy and the challenge of being approved for a mortgage, more and more people are choosing to rent their houses, condos and apartments instead of buying. The U.S. Census Bureau says home ownership was the lowest during the first quarter of 2010 since the first quarter of 2000.

If you are one of the millions who rent your home, here are some tips on getting the most out of your lease.

Landlord and Tenant Laws: Make sure you know, and understand, the local landlord and tenant laws. What problems and tasks are the responsibility of your landlord and what are yours? When are you due for a new coat of paint, and who pays for spraying for bugs? Remember to check and make sure the rules apply to your landlord—in some areas, those who rent out only one or two properties are exempt from some rules.

Breaking a Lease: Most people don't have plans to break a lease when they sign one, but life sometimes goes in a different direction than expected. Make sure you understand what your obligations are, both financial and otherwise, before you sign your lease, or at least before you decide to break it. When you are signing your lease, if you think there is a chance you might need to break it, talk to the landlord and see if a shorter lease is possible.

Storage: If you have done your best to whittle down your belongings and it still won't all fit in your new pad, investigate storage companies. Paying for off-site storage is usually less money than looking for a place with an extra bedroom. You don't actually need your winter clothes on-hand in the summer.

Rental Discounts: Look for apartments or complexes in your area that are offering discounts or one free month deals. In some areas, it is common practice to offer renting incentives. Just make sure you read the fine print and know when you will receive your free month, and if there are any obligations on your end.

Refer a Friend: Does your building have a "refer a friend" program? If so, make sure you know what the opportunity is. Also remember not to refer any friends unless you actually do like where you are living—awkward neighbor situations could arise otherwise.

Renters Insurance: While signing up for renters insurance will cost you money at the outset, it will save you money if you experience a fire, theft or disasters of another kind. Knowing you will be able to replace your belongings will save you stress and worry, before, after and during. More information is available about renters insurance through 360 Degrees of Financial Literacy.

The most important thing to keep in mind when renting is to investigate your options and know the details of your lease before you sign it.

Visit www.feedthepig.org for more money-saving tips.

Save Money on Your Commute

Did you know that a 2009 report from the American Public Transportation Association estimated that Americans can save thousands of dollars by switching to public transportation? The Association determined this amount by comparing the average monthly transit fares to the average cost of driving. In cities like New York, Boston and Philadelphia, the annual savings for one person to switch to public transportation was over $10,000!

Two-car families can save by switching to a one-car household, saving money on additional automobile insurance, fuel costs, maintenance costs and parking. The savings could be put toward a future purchase of a newer, more fuel efficient car or another savings goal. Carpooling is another way to save money by splitting gas costs; it can make a trip more interesting, and sometimes faster if your commute has HOV or carpool lanes.

If you already utilize public transportation or are going to start, consider purchasing monthly or weekly passes to save money. Some employers offer pre-tax commuter benefits, such as discounted passes. Or look into transportation during off-peak hours—sometimes the difference in price can add up if you take an earlier or later train to avoid peak travel times. Of course, walking or riding a bicycle can offer even greater savings and have a healthy impact on your life as well.

Visit www.feedthepig.org for more money-saving tips.

Start Planning for the Holidays Now

The temperature outside may not make you think of winter holidays, but 2010 has flown by and we are officially more than half-way to the holiday season. Now is the perfect time to get a jump on your plans for the holidays. Here are a few tips from Benjamin Bankes for how to spend wisely now for your year-end holidays.

Do you have any travel plans for the holidays? Investigate flight options now before the fares grow even steeper. Now might be the perfect time to schedule a few days off that aren't peak travel times—prices are always highest, and delays the worst, during the most congested travel days. Traveling a few days before or after the holidays, or even on Christmas day itself, could save you time and money. Being flexible on your travel dates will help your wallet.

Are you giving gifts this winter and, if so, how many? Sit down now and make a list of gifts you need to buy and what each person might like. How much can and should you spend for each gift? If you can determine your gift list, you can determine how much you need to save from now until December. Putting aside $5, $10 or $25 each paycheck will add up quickly and you won't have to worry about how to pay for
gifts in December.

Are there any sales to take advantage of this summer or fall? If you know what gifts you are planning to buy, you can take your time to look for, or wait for, sales for your purchases. There are usually sales for Labor Day, Columbus Day and Veterans Day. Extra bonus—you also won't have to deal with the holiday crowds and lines when shopping in December.

Are there any gifts you would like to give that you can make yourself? Planning this far in advance for baked goods doesn't work well but other handmade gifts are usually appreciated and appropriate. Start knitting someone a scarf now and you will have plenty of time to finish before winter.

Does anyone on your list need more time or help to tackle a big project? Time and assistance on projects like organizing the attic or cleaning out the basement could be a great gift you may not have thought of. Time may be money, but sometimes it is easier to find the time for a project than the money for a large purchase.

No matter what your plans are for the holidays, taking steps now will help you stay within your budget later.

Visit www.feedthepig.org for more money-saving tips.

Saving Money at the Grocery Store

Shopping for groceries is an expense everyone has to account for on their weekly or monthly budget, especially if you have taken Benjamin's advice and cut back on eating out. But there are some ways you can save money on your groceries and still purchase everything you need.

• Store Circular: Read the circular from your grocery store, and other stores in your area, to plan what is on sale that you could use to make lunch or dinner this week. If there is a bargain to be had, remember to think about how much space you have to store it, whether it is a 12-pack of paper towels or a few pounds of apples.
• Coupons: Do you have any coupons you can use? Clipping coupons is a great habit to start—and not just from your grocery store's weekly circular, but in the mail and online. There are many sites that offer coupons. Do a little research to find sites that work for your needs and offer products you use.
• Shopping List: Make a shopping list before you go to the store, and include quantities for each item. If you need yogurt or oranges, how many do you need? Planning ahead is great, but not if your food will spoil before you use it.
• Generic and Store-Brands: When you are at the store, remember to look for generic and store-brand items. They are usually less expensive for the same or similar quality product. If you are absolutely married to a specific brand for one item you need, how about generic products for other items?

Always remember to go to the store after you have eaten—you aren't going to be nearly as tempted by things that aren't on your list if you aren't hungry.

Debit Card Pointers

For some, credit cards can be tempting and an easy way to get into debt. Some experts recommend using debit cards to help limit your spending and to ensure that you live within your means. However, debit cards can be dangerous too. Here are some tips to ensure that you use your debit card correctly.

Consider whether or not you want overdraft protection.
Starting in July, new federal regulations will prohibit banks from allowing customers to overdraft debit cards unless the customer specifcally opts into an overdraft plan. Consider whether you would rather have your card declined or whether you want to pay an overdraft fee. Fees can range between banks, but some fees are $30 or more. Ask if your bank will allow you to link your checking account to a savings account in case you do overdraft, rather than charging you the fee.

Know the difference when you choose "credit" or "debit."
These two options are very different and you should know the difference when you use your debit card to pay for your purchases. If you choose debit and enter your pin, the transaction usually happens almost immediately and deducts the money from your account. If you choose credit, the purchase may take several days to actually hit your account, which may make you think that you have more money in your account than you actually do.

Use a credit card for large purchases.
Credit cards can be useful to keep around, especially for large purchases. They offer more consumer protection for disputes or refunds. For instance, if you disputed a charge that was higher than it should be, credit cards have the ability to wipe the charge off your account. It would be more difficult to recover that money from a purchase with a debit card. Federal law says that you must notify your bank within two days of noticing a problem on your debit card.

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Being Healthy Can Be Good for Your Wallet

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Now that the weather is getting nicer, many gyms and health clubs are offering membership specials and discounts to attract new members. Some health clubs offer benefit packages, such as discounts for cell phone service or car rentals. If you were considering joining a gym, now could be an ideal time to do so! Just make sure you read the fine print before joining—is your obligation for a month, a year or more? Will you be automatically renewed after the obligation?

For added financial benefit, check with your health insurance provider. Many give incentives, including cash back, for exercising a certain amount of times per month or year. If you exercise regularly, not taking advantage of perks like these is like saying "No, thank you!" to free money.

Be healthy and save even more money by quitting smoking, walking or biking to work and cooking your meals at home. For the cost of a meal out, you can purchase the makings to prepare several meals at home and ensure that the meals are healthy.

Living a healthy lifestyle and exercising regularly can help you avoid illness or disability that may prevent you from working and a potential loss of income. In addition, regular exercise is proven to improve your immune system and reduce stress. Consider this: health care is one of the biggest expenses of retirement, and the life decisions that you make now can pay dividends if they make you more healthy in the long-term.

Go "Green" to Save Some Green!

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Go "Green" to Save Some Green!

The very first Earth Day was 40 years ago in the spring of 1970. At that time, it was a grassroots event that raised concerns about the environment. In 2010, estimates suggest that more than one billion people in more than 190 countries will participate in raising awareness for the environment and implement personal changes to be more "green" on April 22.

Implement these green ideas and save money at the same time.

• If you are a homeowner and have access to your hot water heater, turn down the temperature from 140 degrees to 120 degrees or lower. This can reduce your home heating bill by 6-10 percent.
  
  
• Have a computer at home? Take advantage of your computer's "hibernate" setting when you aren't using it to prevent the computer from wasting energy. Even better, use a surge protector to turn it completely off. Some computer and television models continue to draw energy even if they are turned off.
  
  
• It may seem trivial, but turn off your lights! Now that days are growing longer and brighter, keep your lights turned off unless you need them. If you leave a room, switch the lights off as you leave. The savings may be slight but can really add up over time. Consider adding a timer or motion sensor to your lights to make it more convenient so you don't even have to think about it.

Winter Savings Tips

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This winter, keep your family cozy and your wallet insulated by following
these easy steps:

• Dial back your thermostat 1 degree cooler during the winter season to
help slash your energy bill.

• Caulk around window frames, door frames and seams on the outside
of the house to keep heat in and cold air out.

• Take advantage of your body's natural heat. Wear sweaters, warm socks
and long pants around the house.

• Use a programmable thermostat to automatically control your home's temperature. It can keep your house cooler during the day and warmer during the evenings. This could save you an average of $180 a year.

Following these tips can immediately reduce your energy costs. Learn
more Winter Savings Tips.

Maintaining Good Credit in Turbulent Times

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Sustaining a good credit score can be difficult when you are unemployed and money is tight. Here are some tips to maintain your financial health.

• Immediately evaluate expenditures, bills and financial accounts for strengths and weaknesses. Adjust your budget accordingly and minimize discretionary spending. Identify where you can lower or perhaps cut out expenses for entertainment, dining out and vacation or holiday travel.

• Contact your financial institution to inquire if it offers a hardship program. If so, you may be able to negotiate a payment plan that may include reduced interest rates and/or a lower monthly payment.

• Understand the impact that cancelling a credit card will have on your credit score. If the card is one that you've had for some time and consistently paid off, it could negatively affect your credit rating.

A credit score is based on your bill-paying history, debt profile and other statistical information. Lenders use this to determine the likelihood of certain credit behaviors, including whether you will pay on time. Closed accounts, liens, bankruptcies and late payments are a few of the financial missteps that can negatively impact your credit score for up to 11 years.

Summer Savings

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Summer Tip #1: To save on your air conditioning bill, turn off unnecessary lights during the day. Much of the energy used by incandescent bulbs is emitted as heat.

Summer Tip #2: To save 1-2 percent on your energy bill, unplug electronic devices and chargers when they aren't in use. Most new electronics use electricity even when switched off. Turn computers and printers off at the power strip.

Summer Tip #3: For a more energy efficient way to cook, use your microwave instead of your stove. Microwaves use two-thirds less energy than conventional stovetops.

Summer Tip #4: Consider replacing your incandescent bulbs with compact fluorescent light bulbs, or CFLs. They use about 75 percent less energy and give off 75 percent less heat but produce the same amount of light as incandescent bulbs.

Summer Tip #5: Make some shade! Awnings, blinds and drapes keep sunlight from entering your home. Install them on windows, skylights, doors, and other places where the sun comes through. During the day, closing the blinds and drapes to filter the sun will keep the room's temperature from rising.

Summer Tip #6: Planting trees in strategic areas can reduce the energy a house uses for cooling by up to 25 percent. Deciduous trees (that lose their leaves) help block the sun during the summer and still allow the winter sun to warm your home. Also, planting trees and shrubs around your air conditioning unit can increase its efficiency by up to 10 percent. Just make sure to place them at least 18 inches away so they don’t block the vents.

Summer Tip #7: “Summerize” your home by adding insulation and sealing air leaks around the house. Add insulation to the attic or add to already existing insulation. Weather-stripping and sealing drafty doors and windows will keep your house comfortable year-round and potentially save you hundreds of dollars.

Summer Tip #8: On a hot, sunny day, dark-colored roofs can reach temperatures of up to 150º to 190º F, heating the living spaces below. Consider adding a reflective coating to a dark roof, or choosing a lighter color when it’s time to replace the roof.

Summer Tip #9: Have an extra refrigerator in the garage that you’re not using? Unplug or recycle that spare refrigerator if you don't really need it, and it could save you up to 10 percent or more on your energy bill.

Summer Tip #10: Thinking about buying a new refrigerator? Refrigerators with a top or bottom freezer design can save you an additional 2-3 percent on your energy bill compared to a side-by-side design.

Money-Saving Ideas for Your Pets

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In addition to being excellent companions, pets have been known to lower blood pressure and provide emotional support to their owners. However, all pets also require care and devotion. Here are some money-saving tips to help keep them
active and healthy.

• As an alternative to buying expensive dog toys at the store, consider buying toys at yard sales or using pet-safe items lying around your house and garage.

• Making your own pet treats can be fun, easy and inexpensive. Use your pet’s favorite foods such as peanut butter and apples, or use healthy ingredients such as oats, flax seed and whole wheat flour.

• If your pet requires constant medication from the pharmacy, wholesale stores such as Costco, Sam’s Club and BJ's may offer the medicine at a reduced price.

• Health insurance coverage is available for many kinds of pets and can be useful for covering unexpected expenses such as serious injuries or illnesses. Policies vary on premium costs and coverage, so take your pet’s age and health into consideration when researching the insurance that’s right for your wallet and your pet. Remember that pet insurance may not be the best, or most frugal, choice for everyone.

Visit www.FeedthePig.org for more money-saving tips.

Five Tips To Survive & Thrive In A Recession

This Article is Courtesy of: Coupons.com

In this economy, everyone is trying their hardest to spend less and save more. However, if you've already cut corners, what's next? In a down economy there are ways to tighten your belt even more, even if it's on the last notch. Here are some ways to not only survive, but to thrive:

1. Live Below Your Means... and Save the Rest

Pay down debt and build up the emergency fund. In times like this, it's more important than ever to have a little extra wiggle room in your budget. If you're cutting it too close each month - or going over - you may need to reevaluate your big expenses.

• Move to a more affordable home
• Trade in your car for a less expensive, more fuel efficient model
• Create a budget to stay on track
• Have money automatically deducted from your paycheck and put into your savings account

2. Limit Shopping

The less you drive, the less you'll spend on gas. That's a no-brainer. However, staying out of the stores and really planning your errands will help you limit impulse purchases, too. Plus, by staying out of the stores you'll have loads more time to do other things.

• Shop at a store that will match prices so that you can eliminate unnecessary trips
• Stop perusing the store circulars that come in the Sunday paper to avoid temptation
• Take yourself off email lists for stores that encourage needless spending. Or, set up a filter/rule in your email client to automatically put shopping emails in a folder so you look at them only when you are planning to shop
• Plan meals for the entire week before you go shopping, and print coupons from Coupons.com to match your list

3. Be Resourceful Every Day

Tap into your creative side to look at what you have in a new light. You'll be forced to use your imagination, which will give you insight into something's hidden potential. You'll also experience a deeper level of satisfaction when creating something out of nothing or repurposing something to give it a new life. There's another great byproduct: you'll save lots of money!

• Try bartering for the things you need on the Mommysavers Bartering Board
• Exchange services with friends and neighbors
• Clip coupons online from Coupons.com - they're free and available all the time
• Pair coupons with grocery store sales to save even more
• Make homemade cards and gifts instead of purchasing them
• DIY: Make your own cleaning products, grow your own produce, make your own minor repairs, etc.
• Investigate free activities within your community and make a calendar to share with friends

4. Less is More

Sometimes less really is more. Consider subtracting some things from your budget and adding quality of life - and some cash. The things that provide the most satisfaction in life are usually free. Deepening relationships with family, spending time with friends, participating in community, plus doing things that stimulate us intellectually and spiritually all contribute to quality of life without draining our pocketbooks.

• Instead of going out to a restaurant, invite friends to your house for a potluck dinner
• Unplug the cable and start reading more books, borrow DVDs from the library or watch shows online
• Ditch your landline phone completely
• Declutter your home and sell what you don't need on Craigslist, eBay or at a rummage sale
• Avoid over-scheduling your kids and institute a family game night instead

5. Give

Finally, count your blessings. Even during a recession, we still live in the wealthiest country in the world. If you can afford to reach out to those less fortunate, now is a great time to do it. Nothing will make you feel wealthier, and you can give your time even if you can't give your money.

• Volunteer your time at a food pantry
• Make a meal for a family who has lost a job
• Sponsor a child in a developing country

Be a Savvy Shopper

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Be a Savvy Shopper

In today's economy, it's important to assess your needs versus wants before making a purchase. Is it something you really need or something you simply want to purchase? But remember, looking at needs versus wants alone may not be enough to keep your wallet happy and healthy. Here are some quick and easy shopping tips which may boost your savings at the end of the month:

• Beware of no interest or low monthly payment offers on large items. Missing a single payment could increase the interest rate and potentially wipe out any money saved by buying this item on sale.
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When comparison shopping, don't get distracted by how much an item has been marked down. Look at the current price and compare that with other similar items.

Considering a big ticket item? Remember to factor in additional expenses that may not be included in the ticket price, such as storage, transportation or an insurance increase.

Following these tips can help you shop smarter and save more. And always remember to contribute a portion of any savings to your retirement fund every month.

Supplementing Your Income

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Supplementing Your Income

If you've reduced your monthly expenses but still find it hard to save each month, consider additional sources of income—which doesn't always mean working a second job on the side. Look for income sources that are flexible, sustainable and enjoyable. Here are some ideas:

• Become a virtual assistant – Virtual assistants are individuals hired to perform duties online that don't require a physical presence, such as conducting research, designing websites, writing articles and making reservations.
• Start a home business – Turn your skills and hobbies into an additional income source. Home businesses are often inexpensive to start and easy to grow and promote via the Internet.
• Write a blog – Earning a little extra money can be as easy as blogging from your home. With free or low-cost blog publishing tools, you could turn a small time investment into extra savings.

There will always be opportunities to earn extra cash. Research these and other methods of earning supplemental income to help feed your emergency fund and retirement savings. Read more on keeping an emergency savings account.

Clean the Slate for a New Year

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Clean the Slate for a New Year

With the start of a new year comes the chance to leave behind any bad money habits from 2008 and start fresh with your financial goals. One of the most important things you can do to jumpstart the New Year is to take time to assess your finances. Here are some simple tips to set you on track for a financially successful year:

• If you can't afford it, don't buy it.
• Create a monthly budget and stick to it.
• Live within your means: evaluate your finances, and cut back on unnecessary expenditures. This can dramatically reduce your incurred debt.
• Keep up to date with your monthly payments, such as those for a student loan and mortgage. Missing a single month could cost you thousands of dollars in interest down the road.
• Reassess your life and car insurance policies. You could potentially save money by switching to a different company.

Commit to these and other positive financial behaviors. In one year from now, you'll look back and commend yourself for setting those goals for a successful financial future. For more information, read eight steps for rebuilding your finances.

2009 Tax Tips

2009 Tax Tips

With your 2008 tax return due just around the corner, it's time to brush up on those tax skills. Here are some helpful hints that may help you when filing your return:

• If you are self employed, open and fund an SEP-IRA before filing your tax return. You can claim the deduction in 2008, even if you make a contribution to the plan in 2009.
• If you don't normally itemize your deductions, consider "bunching" expenses every other year to exceed the standard deduction.
• Estimate your federal and state tax liabilities. If you didn't withhold enough, increase your withholding for this year's last few paychecks.
• To exempt yourself from any penalty for underestimating Federal or state taxes, it is critical is that your withholdings of federal or state taxes meet one of the following:
• at least equal to 90% of your tax liability for 2008
• at least the same as your 2007 tax liability.
• If you estimate you will owe state taxes, you can chose to prepay those before January 1, and increase your itemized deduction for 2008.