7 Days Until US Tax Due…Do You Owe Money? April 10, 2006
There’s one week left to file your income tax return and contribute to your IRA (April 15 falls on a Saturday, so you have until April 17 to mail your returns this year). I know, I state the obvious, since you probably have an interest in personal finance and are visiting this site. But I have a story about one of my ex-coworkers. I had a conversation about taxes one time a few years ago, and I asked him a question about deductions. He told me that he has no idea and that he didn’t file his tax in the previous years, so what does he know? Here’s how our conversation went:
Me: Do you know if our computer purchases are tax deductible?
Co-worker: I don’t know, I don’t pay tax.
Me: You didn’t pay tax for your computer purchases?
Co-worker: No, no, I don’t pay income tax.
Me: You didn’t pay income tax? Do you have some tax shelter?
Co-worker:No, I just don’t believe in it. I read that income tax is optional, so I don’t bother with it.
Me: So how do you know if you owe money? Or better, if Uncle Sam owes you money?
Co-worker:It’s not worth it. I don’t owe any anyway. I haven’t paid in 4 years.
Me: Sorry to break it to you, but income tax is not optional, but if you don’t owe money…
I was shocked that someone actually believed that tax is optional and didn’t pay tax for four years. I tried to contain my shock, but how could I? This co-worker is pretty smart, but who does this??
In any case, if I know that someone owes me money (US Government), I’m going to file taxes on time. This year, most of my deductions were from my mortgage interest, so I got a return of over $5000. Since we’re moving this summer, I can’t put that into savings but at least I’ll have enough to cover for moving expenses. So do you owe money? Either way, there’s 7 days left to file!