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.

Courtesy of: FeedthePig.org

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.