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File and pay on time

Many people won’t file their returns if they owe tax and can’t pay. That’s the wrong way to go about things. Think of the IRS as your Mom. When it’s your mom’s birthday, she doesn’t want a present from you, but she does expect a card or a phone call. Same with the IRS. You make this seriously worse by not filing a return. But if you file, the IRS will work with you on whatever tax you owe.

To extend the deadline, file Form 4868 by April 15, 2013. This gives you a six-month extension to file. On the form, you need to make a reasonable estimate of how much tax you owe and include a for that amount. But once again, it’s better to file and not pay than to not file and not pay.

Avoid mixing business and personal finances.

At best, mixing personal and business money makes for confusion. At worst, you might be liable for additional taxes. Avoid this by having separate business and personal checking, and a separate business and personal credit cards.

 

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