Tax day is a great day to examine your financial situation and make updates. The first one is a no-brainer.
- File your taxes. Even if you don’t have the cash to pay the bill, you must file by April 15th. There are exceptions. You can request an extension, and if you are deployed to a combat zone, you get an automatic 6 month extension. If you do have a tax bill to pay, you must pay the bill by April 15th or you will have interest charges and you may have penalties.
- Contribute to your 2008 Roth IRA. You have up until April 15th to contribute to the previous year’s allowable dollar value. For 2008 it was $5,000 per person (up to the total earned income) or $10,000 per married couple. People over 50 can contribute up to $6,000.
- Consider revising your withholding. I’ll be honest, I like to get a small refund. But if your refund in more than 50% of your monthly take home pay, you’re probably having too much withheld. Increase your exemptions at the myPay web site.
- Consider using Taxslayer to prepare and e-file your taxes. It’s easy and free to military members.
- Take another look at The Thrift Savings Plan. Remember, each dollar you contribute is pre-tax money, meaning you don’t pay income tax on the money until you withdraw it from the account. It’s like getting 15% added to your investment account every month.