Read this if you’re running late on your taxes

April 15 15 Comments latest by observer

If you’re running late filing your taxes, don’t worry.

Get an automatic 6-month extension by filing a simple IRS form.

And if you still haven’t picked up a copy of the 2008 Tax Makeover Guide, check it out here:

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My college roommate JRK sends me some interesting thoughts about the upcoming government tax rebates from an MIT report. As usual, it’s not just about rationality, but about the form in which the money is delivered (debit card vs. check):

• [The 2001 tax rebates] “show that taxpayers spent about two-thirds of their rebates within six months of receiving checks.”

• “The 2008 rebate program is aimed at low-income households, because these households are the least likely to save the rebates.”
• “…rebates that are received as electronic deposits may seem less like spendable cash, and more like potential savings, than checks that taxpayers receive in the mail”
• “I suspect that giving people a prepaid debit card will do more to rejuvenate the economy than mailing out checks, but direct deposits wouldn’t be nearly as effective,” Ariely said in a recent commentary for the Marketplace radio program. “I also suspect that if we added a line on the debit card that reads ’spend the government’s money’ this would work even better.”
• “If consumers save rather than spend the money, there will be no stimulus”

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15 Comments latest by observer

Why you should be happy to get a tax refund, not guilty

April 10 42 Comments latest by Kelli Myers

When it comes to be tax time, people love to start throwing around phrases that enrage me and make me wish to become a cartoon hero that points at someone and ejects a roll of duct tape towards their mouths to silence them. In my dreams, I would be a cross between Spiderman and a librarian.

Anyway, how often have you heard this phrase?

“If you get a tax refund, it means you’ve given the government too much money.”

This oft-repeated phrase assumes rationality: ‘If you get a refund, it means you sent extra money to the government! Why would you let them make interest off your hard-earned money? You should only send the minimum amount!’ Then these people are usually out of breath because of their own self-proclaimed brilliance.

Technically, they’re right. I live in a world of reality, however, which means that “technically” isn’t always correct. Here’s why I’d rather get a tax refund than owe the government money:

First of all, if you end up owing the government money at tax time, most people don’t have extra cash lying around. We know this because they are horrible at managing their money and have record debt rates. Sorry, it has to be said.

Second, how much interest are we really talking about? Let’s say you get a government rebate of $600. At my high-interest ING account, that’s $1.50/month in interest. Oooh, the government is making bank off my money! Get a life.

And, in fact, people’s opinions reflect this:

…when asked if they’d prefer to owe taxes, get a refund or break even, none said “owe,” according to the USA TODAY/Gallup Poll. Fifty percent hope they break even, and 45% hope they get a bigger refund this year than last.

In real life, $600 that you owe to the government would affect your life far more than getting $600 back, meaning it’s better to get money back than to owe it. So if you end up getting a tax refund, don’t feel bad. And don’t just follow what the pundits say. We live in the real world, and there’s a difference between the best decision and the financially smart one.

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If you haven’t yet started your taxes: Pick up a copy of The 2008 Tax Makeover Guide, 59 pages of tax tactics and tips for getting started with your home, wedding, business, and investments.

Read more or buy now.

Bonus: The first 5 people to purchase the ebook will receive free copies of H&R Block’s TaxCut software (a $59.95 value, free).

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42 Comments latest by Kelli Myers

Announcing the 2008 Tax Makeover Guide

February 29 17 Comments latest by Ramit Sethi

Today, I’m announcing a new eBook that covers all the basics of taxes. It’s called the 2008 Tax Makeover Guide (buy it here).

It’s written by Todd Doerr who, over the last three days, has written posts covering most of the major events in our 20s and 30s:

• What to do before you file your taxes this year
• How college students can save their parents tax money
• What to do, tax-wise, if you’re recently engaged or married

To put it all together, he’s written an eBook that covers taxes from beginning to end. The 2008 Tax Makeover Guide is 59 pages of tax tactics and tips for getting started with your home, wedding, business, and investments. He even has specific sections on tax strategies if you live abroad, just had a child, or just don’t know how to get started.

I love simple guides that help people get started. They don’t have to include the fanciest, sexiest tax strategies, because those are irrelevant to 99% of us. But when I see something that is a well-written, basic guide to getting started, I pay attention. And that’s why I wanted to feature his eBook here.

Take a look at some samples.

Lots of samples
Todd’s posts earlier this week are a good example of what he knows. But what’s in the eBook itself? (Click to enlarge.)

The Table of Contents

Even more Table of Contents

Sample: Understanding tax brackets

Sample: Preparing for a new baby (tax-style)

Those are just short excerpts of the full 59-page guide.

Buy The 2008 Tax Makeover Guide now
So, look guys. This is not a hard sell. The reason it’s a “Special I Will Teach You To Be Rich” edition is that I got Todd to agree to offer it to iwillteachyoutoberich readers for 33% off the normal price. That’s how I do it, Punjabi-style.

The 2008 Tax Makeover Guide costs $19.99 until April 10th, 2008 (buy it now). After that, the price goes up. The whole point of this eBook is to use it right away.

100% satisfaction guaranteed: As always, if you don’t love the eBook, just send me a note and I’ll return 100% of your money, no questions asked. Last time, I sold hundreds of 2007 Ramit’s Guide to Kicking Ass and had about 4 people ask for returns (which I immediately issued).

What do you have to lose? We spend $20 going out for a couple of drinks or at one dinner. The whole point of iwillteachyoutoberich is to be conscious about our spending. Would it be worth it to pay $20 and figure out how to optimize your taxes? If you make a salary of $50,000, could this book save you at least $20.01? I think so. With this eBook, you should make *many times* your $19.99 back. If you don’t, send me an email and you’ll get your money back.

So treat this as an experiment. If you like the eBook, keep it. If not, get a refund and keep the eBook anyway. I’m pretty sure you’re going to like it, though — that’s why I’m featuring it on iwillteachyoutoberich.

Buy the 2008 Tax Makeover Guide, sit down and read it for 2 hours, and get your taxes in order for this year and the rest of your life.

Buy the 2008 Tax Makeover here

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17 Comments latest by Ramit Sethi

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