Tax Extension Catch-22
Since I'll be in Israel for the next couple of weeks, I thought I'd apply for an extension of the deadline for filing my income tax return, something that (as will soon become apparent) I've never done before. It turns out that you can put off doing your taxes for up to six months, but you still have to pay your taxes by April 17. To pay your taxes, however, you have to do your taxes--i.e., run the numbers and fill out the forms. You could take a wild guess, I suppose, but there's a penalty for estimating wrong.
Then I noticed you can get an automatic two-month extension, with no payment or application required, "if, on the regular due date of your return, you are 'out of the country.' " Well, I thought, this is the extension for me. But then I discovered that, although I will literally be out of the country, I won't legally be "out of the country." Not only is being abroad not enough to place you "out of the country," but you can legally be "out of the country" even if you're actually in the U.S. on the filing deadline.
I already have a headache, and I haven't even begun working on my return.
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Be a man dude, refuse to pay taxes.
two words......
Fair Tax
But then I discovered that, although I will literally be out of the country, I won't legally be "out of the country." Not only is being abroad not enough to place you "out of the country," but you can legally be "out of the country" even if you're actually in the U.S. on the filing deadline.
The writer of this paragraph also writes the majority of the drug articles for this fine publication. Now you know why.
One word.....
Anarchy
IRS penalties are just a percentage of what you owe. So, if you are owed a refund, you don't even have to file on time - there is no penalty. In fact, the IRS would love for you to not file at all if you are owed money.
You can also guest-imate what you owe, then not pay it with the extension. It will be granted anyway. Who knows how many 1099's you are still owed? What, that's taxable? Again, you may pay a penalty, so if you don't owe much, the penalty won't be much.
If you owe a lot, I recommend you never return to the country. You'll show those bastards!
No surprise here: the same characters that wrote the labyrinthine tax code conjured up the "out of country" rule.
Don't do anything, they won't notice. Honest.
My advice to you is in direct conflict with what most tax and financial experts say you shouldn't do: Work your withholding so you always get a refund.
That way, you'll never 'owe' any taxes at tax time, leaving you free and clear for the easy version of the filing extension.
The other answer is:
Do your taxes in January or February like, well no one does, and then you won't have this crunch at atax time.
Just file any kind of numbers then use your 1337 skilz to hack a refund.
Easy.
One word.....
Anarchy
Michael,
That is my word, and I didn't feel like using it on this topic. The word I felt like using is...
Turbotax
Watch it, Michael.
I'll defend my anarchy turf here.
I tried using Turbotax last year.
First time in my life I've ever had heart burn.
This year I just hired an accountant.
two words......
Fair Tax
One word: Oxymoron
Tea party next week...
Don't worry about it- when they audit you, just say, "Stick it in yer ear, ya jack-booted thug! You work for me; I don't work for you!"
That's what I plan to do. (I also plan to keep my passport up to date)