Need More Time to Do Your Taxes?

If you keep delaying the inevitable and haven't done your taxes yet, there is a backup option. For no penalty, you can file for an automatic extension using Form 4868 to get six extra months. A few caveats:

1) If you think you might owe money, pay it when you file this form. You are not getting an extension to pay, just to file. If you don't pay what you owe, you'll pay a penalty. You are better off paying a little bit in case you owe money and getting it refunded when you file.

2) You do not get an extension to contribute to your Roth IRA, so don't forget that before the 15th.

3) You won't get your stimulus package check from the government until you file this year. Most taxpayers will be getting $300, but you need to file a return to get your check.

See more information on filing extensions on the IRS website.

You're Getting a Tax Refund? You Messed Up.

Hopefully, many of you have already done your taxes by now and know whether or not you are getting a refund or not.

While it may seem that getting a refund is great, it actually means you overpaid during the year. You gave the government a free loan, and now they are paying you back. Wouldn't it have been better if you never gave them a loan at all?

If you are getting a substantial refund, it may be because you have some deductions, lowering your tax bill. If this is the case, you'll want to lower the amount your employer withholds from your paycheck. Talk to your HR administrator and ask to revise your W-4.

You'll want to increase your exemptions in order to reduce the amount of withholding from your paycheck. You'll end up getting bigger paychecks and earning money in your bank account rather than giving out a free loan.

Make Your 2007 Roth IRA Contribution

April 15th is the deadline for contributing to your Roth IRA for 2007. If you made less than $99,000 last year, those of us under 50 can contribute $4,000 of after-tax income. (If you made less than $114,000, you can still contribute, just not the full amount.)

Remember, your contributions to your Roth IRA can always be withdrawn. But you should try to avoid touching the money, since any interest or earnings are tax-free! They can be withdrawn when you retire, need a home down payment, along with some other special situations.

If you are a recent college graduate, you can expect your $4,000 to be worth about $70,000 when you retire -- all tax free. That means more money you can spend during your adult life, rather than having to save for the future.

If you don't have a Roth IRA, consider opening one through a mutual fund company, like Vanguard or Fidelity. If you don't know which fund to put your money in, contribute to a money market fund, balanced fund, or S&P 500 index fund. When you have time to make a more strategic decision, it will be easy to move the money.

You have two weeks to make this happen, so don't forget! Remember, you can always tap the money later if you absolutely need it, since your contributions can always be withdrawn.

If you're interested, check Investopedia or Wikipedia for more details on the specifics of a Roth IRA.