Dan Geltrude, Founder Geltrude & Company, joins Yahoo Finance Live to share tips on filing your taxes last minute and some changes that may affect next year’s tax return.
- Well, if you haven't done your taxes yet, you've got just a few days to go until the deadline. May 17 is the big day. So what happens, though, at this point if you realize you can't necessarily pay your taxes or you're looking for a quicker refund? We've got somebody to answer all the last-minute tax questions here. Dan Geltrude is founder of Geltrude and Company.
Dan, I have to say that I sent it off yesterday. So I'm one of those procrastinators. But certainly a lot of people had an extra month this year to delay the filing. But what are some last-minute things you think people should be thinking about, especially as it relates to actual payment? Because there's certainly going to be some people with some surprises who say, well, what happens if I can't pay at this point?
DAN GELTRUDE: It's a problem that many people are going to have. And the reason for that is during the pandemic people weren't thinking about whether their withholdings were properly set up. They were just thinking, I need money to live. And that could very well have left them short. So if you're in a situation now where you're getting ready to file between now and Monday and you don't have enough money to pay your tax bill, what do you do?
The first thing to keep in mind, file your taxes. Do not delay in filing the actual tax return, even if you don't have the funds to pay. Keep in mind that willfully not filing a tax return is actually a crime, so it's that important that you need to file.
Now if you can't make the payment, you basically have three options here. One, you can request a monthly installment plan in order to make payments to pay off the tax bill. Two, you can do an offer in compromise or, three, you can file your tax return, not pay, or make a partial payment and then figure out how to work out the balance of what you owe from there.
ZACK GUZMAN: Dan, I love having you on for tax time segments because you bring about 1,000 times the energy than most of our tax guests do. But it's an intriguing thing because if you can't pay, you can request to file a compromise and push this out and elongate it a little bit. But it's also coming at an interesting time, as you point out in the pandemic, that a lot of people didn't have a lot of insight into maybe the best way to do taxes. What makes this year maybe a standout from others in what people should expect this time around? Because I noticed over the last couple of years that refunds have been coming down as well.
DAN GELTRUDE: Well refunds the last couple of years are coming down essentially, I believe, because of the either lack of planning or there was planning from the standpoint of, I don't want to wait for my refund. I want that money now. So it could go either way in that regard. But one thing I do want to point out here is that, from a tax preparer standpoint-- and this is a word to all those in having their tax returns prepared-- ask this question.
Am I better off married filing separately or married filing jointly? This year-- or last year, rather-- was a little unique related to non-taxability of unemployment. And you could end up in a situation where it would be better off from a tax perspective to file married filing separately as opposed to jointly. Some preparers don't do that automatically to do the comparison. So I just want everyone out there to ask the question, whether they're prepared, did the comparison on how to file their tax return.
- Dan, I feel exposed when you're talking about a lack of planning. I'm certainly guilty of that. A lot of people are going to be looking at their filings this year to say, OK, so how do I think ahead to next year? You talked about the withholdings, checking on that. What are some things that you think now that people are in this position should be looking ahead to?
DAN GELTRUDE: Based upon where we are right now, it doesn't look like there are going to be a lot of significant changes related to the 2021 tax year. However, what we don't know is whether the Biden administration's proposal on whatever tax changes might be as to whether they will be retroactive into 2021. Now if that happens, there's going to be a lot of chaos. So let's hope anything that changes won't be effective until 2022 so we do have the chance to plan accordingly.
But people need to think about this. Unemployment payments are going to be running out right now on a federal basis. It looks like September. So you want to start thinking about what your cash flow is going to be, where the money's coming from, and have you properly planned for next April as to whether you're going to have a refund, whether you're going to owe, or best of all, it's a break-even-- you file your tax return and no one owes anyone anything. You held on to your money for as long as possible, which is how you win in the tax game.
ZACK GUZMAN: Yeah, I got pretty close this year. I think my bill was $192. Felt pretty good about coming close to break-even there, just as you planned it out. But appreciate you coming on here to chat with us, the ever-energetic Geltrude and Company founder, Dan Geltrude. Appreciate it, man. Have a great weekend.