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Tax Tip of the Week
For the week of
March 4, 2002

Don't wait until the last minute to prepare your 2001 tax return

If you procrastinated about preparing your 2000 income tax return, don't make the same mistake this year. Here are some good reasons to get an early start on your 2001 return.

Get your refund on the way. If you're entitled to a refund, you can ease your cash flow by getting your refund on the way. Since Uncle Sam doesn't pay interest on your refund, you're giving the IRS an interest-free loan until it processes your refund.

Contribute your refund to an IRA. You may be able to claim an IRA contribution on your 2001 return if you make your contribution by April 15, 2002. Say you're in the 27.5% tax bracket. You could save $550 in tax by making the maximum $2,000 IRA contribution. And by filing your return early, you may receive the $550 refund in time to help fund your IRA.

Use your 2001 tax return for tax planning. It's not too late for some last-minute tax planning. Once you've penciled out the preliminary numbers, you might decide it makes sense to contribute to an IRA or to contribute to another retirement plan. You generally have until the April 15th deadline to make your 2001 contribution.

Find out your estimated tax requirements. If you're required to make estimated tax payments, preparing your 2001 return early will give you plenty of time to prepare for your upcoming first quarter estimated tax payment due April 15, 2002.

Just because you prepare your return early doesn't mean you have to file it early. For example, you might want to file closer to the tax filing deadline if you owe income taxes.

Let us help you to get an early start on your 2001 tax return. Give us a call.



Prior Tax TipsClick here to view previous tax tips.

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