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Tuesday's Tax Tip: Managing Your Money

Posted by Gayle Kesten Tuesday, Apr 15, 2008, 09:36 AM ET

The number 16 seems anything but sweet when you realize it's the Constitutional amendment responsible for giving Congress the power to collect taxes.

For you historians, the year was 1913. Filing deadline was originally March 1. Five years later the deadline was changed to March 15, then in 1955 it was pushed back another month to April 15. Coincidentally, that's the very same day President Lincoln died in 1865 and the Titanic sank in 1912.

And you thought writing that check to Uncle Sam was painful.

No matter, I trust your tax return or application for extension is en route -- or will be in the next few hours. Just as long as your envelope is postmarked April 15, your tax return is considered on time.

Let's look forward. If you owed money this year, then you should be thinking about how to prevent a repeat performance 365 days from now. As an employee of a small business, consider upping the amount you withhold from your paycheck. If you're self-employed, make sure to pay your quarterly taxes (due the 15th of April, June, September and January). In either scenario, the IRS' Withholding Calculator can help you determine how much to sock away.

On the flip side, perhaps you're in the enviable position of receiving a refund. You can track your money through the IRS' secure Web site. The IRS advises waiting seven days before status-checking if you filed electronically, and four to six weeks if you filed by mail. (Of note, if your computer and the tracking app don't play nicely, your browser may be at fault.)

Any thoughts about how you'll spend your refund check? MSN Money's Liz Pulliam Weston offers these seven solid suggestions:

1. Blow away 10 percent as a reward. (Perhaps one of these 10 tech toys will suit your fancy?)
2. Pay down/off your credit cards.
3. Fund your retirement with a 401K, IRA or Roth IRA.
4. Boost your emergency fund.
5. Contribute to a college fund.
6. Continue your education.
7. Attend a professional conference.

More for that list: When we're able, my husband and I devote a portion of our refund to make an extra mortgage payment. Much of the rest typically winds up in the hands of our son's summer camp. A freelancer friend of mine uses what she gets back to pay her estimated taxes for the following year, while another small-business owner buddy plans to use his return to boost his local advertising.

If you're getting a refund, what do you plan to do with it? If you had to pay out, what steps will you take to ensure the same doesn't happen next year?

Overlooked Deductions

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