Stay atop Your Finances with These 2000 Tax Dates

By Clifton Linton
Writer, mPower

It's the time of year everyone loves to hate. Tax time.

You may groan, but this is also a great time to think about next year's taxes. With preparation now, you can avoid the typical stress when April 2001 rolls around.

The key is creating a plan. Here's a calendar of key tax-related dates to help make planning your financial year easier.

Get 1999 Out of the Way

If you're trying to get those 1999 taxes out and can't find the right forms, let us relieve your stress: Most of the common forms should be available at your local library or post office. Or, you can get them FOR FREE online at the IRS Web site: (link to http://www.irs.gov/forms_pubs/index.html)

If you're looking for great advice on how to use retirement savings tools to trim your tax bill for 1999, unfortunately there's not much you can do in such a short amount of time. Fortunately, you do have enough time to open or contribute to an IRA for the 1999 tax year, if you haven't already done so (the deadline is April 17).

On to 2000

April 1, 2000 This was the deadline to take a required minimum distribution from your IRA and/or 401(k) plan if you turned 70½ in 1999.

If you didn't take this distribution, you will be liable for a penalty of up to 50% of what you should have taken out. An exception is made if, at age 70 ½, you are still working for the employer who sponsors your 401(k) plan. In that case, you're required to start taking distributions by April 1 of the calendar year following the year in which you retire.

If you turn 70½ in 2000, you will have to take your first minimum required distribution by April 1, 2001.

April 17 Tax day. Federal and state income tax returns and payments are due.

This is the last day you can open or contribute to an IRA for the 1999 tax year.

If you won't be paying your 2000 income taxes through withholdings, your first quarterly installment for the year is due. You can file your quarterly taxes using a Form 1040-ES.

This is the last day you can file for an extension for the 1999 tax year. You can fill out a Form 4868 to get an automatic extension until August 15. One caveat, there is no extension on tax payments.

Additionally, if you were owed a refund in 1996 and didn't file a return, this is the last chance to file before your refund is lost. The IRS reports that about $2 billion in outstanding refunds are waiting to be claimed. If you didn't file and were owed a refund, you won't be charged any penalties. However, if you haven't filed a return for 1997 or 1998, your refund may be held up until all outstanding returns have been filed.

If you were owed a refund for 1997 and/or 1998 and haven't filed, this is a good time to do it.

For more information: Now that you've finished your 1999 taxes, CLICK HERE to find out about some strategies for the 2000 tax year

June 15 If you are a U.S. citizen or resident alien, living and working outside the U.S. and Puerto Rico, you must file your taxes now and pay any tax, interest, or penalties.

If you aren't paying your 2000 income taxes through withholdings, your second quarterly installment is due.

August 15 Your form 1040 tax return is due if you filed for an automatic extension in April.

If you still need more time, you may file for an additional two-month extension by submitting Form 2688.

September 15 If you aren't paying your 2000 income taxes through withholding, your third quarterly installment is due.

October 16 Last filing deadline for the 1999 tax year for those who requested two extensions.

December 31 This is the last day you can open a new 401(k) plan, if you're an employer, a new Keogh plan, or self-employed.

If you turned 70½ in 1999, you have to take your second minimum distribution by this date from your 401(k) and/or traditional IRA plans. You had to take your first distribution by April 1, 2000.

If you turned 70½ this year, you have until April 1, 2001 to take your first minimum distribution. You will have to take your second minimum distribution by December 31, 2001.

A Few Goals to Think About

If you have a defined contribution plan through work, such as a 401(k) or 403(b), try to raise your annual contribution. If your employer offers a matching contribution, make sure you get the full match.

By increasing your 401(k) contributions, you will reduce your taxable gross income, thereby reducing your tax burden.

If you save for retirement in an IRA, consider contributing early in the year. Your money will start earning interest right away. For example, if you invest $2,000 in an IRA at the beginning of the tax year, assuming a 10% rate of return, that money will grow to $2,265, by the final IRA deadline, 15 months later.

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.

Stay atop Your Finances with These 2000 Tax Dates

By Clifton Linton
Writer, mPower

It's the time of year everyone loves to hate. Tax time.

You may groan, but this is also a great time to think about next year's taxes. With preparation now, you can avoid the typical stress when April 2001 rolls around.

The key is creating a plan. Here's a calendar of key tax-related dates to help make planning your financial year easier.

Get 1999 Out of the Way

If you're trying to get those 1999 taxes out and can't find the right forms, let us relieve your stress: Most of the common forms should be available at your local library or post office. Or, you can get them FOR FREE online at the IRS Web site: (link to http://www.irs.gov/forms_pubs/index.html)

If you're looking for great advice on how to use retirement savings tools to trim your tax bill for 1999, unfortunately there's not much you can do in such a short amount of time. Fortunately, you do have enough time to open or contribute to an IRA for the 1999 tax year, if you haven't already done so (the deadline is April 17).

On to 2000

April 1, 2000 This was the deadline to take a required minimum distribution from your IRA and/or 401(k) plan if you turned 70½ in 1999.

If you didn't take this distribution, you will be liable for a penalty of up to 50% of what you should have taken out. An exception is made if, at age 70 ½, you are still working for the employer who sponsors your 401(k) plan. In that case, you're required to start taking distributions by April 1 of the calendar year following the year in which you retire.

If you turn 70½ in 2000, you will have to take your first minimum required distribution by April 1, 2001.

April 17 Tax day. Federal and state income tax returns and payments are due.

This is the last day you can open or contribute to an IRA for the 1999 tax year.

If you won't be paying your 2000 income taxes through withholdings, your first quarterly installment for the year is due. You can file your quarterly taxes using a Form 1040-ES.

This is the last day you can file for an extension for the 1999 tax year. You can fill out a Form 4868 to get an automatic extension until August 15. One caveat, there is no extension on tax payments.

Additionally, if you were owed a refund in 1996 and didn't file a return, this is the last chance to file before your refund is lost. The IRS reports that about $2 billion in outstanding refunds are waiting to be claimed. If you didn't file and were owed a refund, you won't be charged any penalties. However, if you haven't filed a return for 1997 or 1998, your refund may be held up until all outstanding returns have been filed.

If you were owed a refund for 1997 and/or 1998 and haven't filed, this is a good time to do it.

For more information: Now that you've finished your 1999 taxes, CLICK HERE to find out about some strategies for the 2000 tax year

June 15 If you are a U.S. citizen or resident alien, living and working outside the U.S. and Puerto Rico, you must file your taxes now and pay any tax, interest, or penalties.

If you aren't paying your 2000 income taxes through withholdings, your second quarterly installment is due.

August 15 Your form 1040 tax return is due if you filed for an automatic extension in April.

If you still need more time, you may file for an additional two-month extension by submitting Form 2688.

September 15 If you aren't paying your 2000 income taxes through withholding, your third quarterly installment is due.

October 16 Last filing deadline for the 1999 tax year for those who requested two extensions.

December 31 This is the last day you can open a new 401(k) plan, if you're an employer, a new Keogh plan, or self-employed.

If you turned 70½ in 1999, you have to take your second minimum distribution by this date from your 401(k) and/or traditional IRA plans. You had to take your first distribution by April 1, 2000.

If you turned 70½ this year, you have until April 1, 2001 to take your first minimum distribution. You will have to take your second minimum distribution by December 31, 2001.

A Few Goals to Think About

If you have a defined contribution plan through work, such as a 401(k) or 403(b), try to raise your annual contribution. If your employer offers a matching contribution, make sure you get the full match.

By increasing your 401(k) contributions, you will reduce your taxable gross income, thereby reducing your tax burden.

If you save for retirement in an IRA, consider contributing early in the year. Your money will start earning interest right away. For example, if you invest $2,000 in an IRA at the beginning of the tax year, assuming a 10% rate of return, that money will grow to $2,265, by the final IRA deadline, 15 months later.

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.