Tuesday, April 10, 2007
Tax Extension
Yes, I'm going to file an automatic extension. I just printed out the form. I think I am probably quite close to break even on my taxes. So not desperate to get a refund. And the interest/penalties on paying late are pretty small (as long as you pay before October 15) so I'm not in a rush to pay up either. I think people must be scared by that word "penalty" and think something awful will happen to them if they don't pay on time. But it ends up not being much worse than a credit card interest rate (7% p.a. + 1/2% per month = 13% p.a. and if 90% of your taxes are already paid by April 17th then the 1/2% per month penalty isn't added) on the amount that you owe in excess of withholding. In May I'll have plenty of time to sit down and work it all out correctly.
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2 comments:
How come you had so much tax withheld? How did you do the planning for withholding taxes on your capital gains? That’s a hell of job considering the many tradings you had. I was almost hit by penalty this year because of large amounts of capital gain last year. This was why I finally did our tax before the deadline this year. :-)
I have a big disallowed investment interest carryover and some CGT losses carryover. So that explains part of it. I claimed zero exemptions on my withholding. My spreadsheet says I should get a $1000 refund but that is very rough. So anyway any payment I owe will be small.
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