Tax Brake with Robert G. Nath, Esq.

1. Get your 1099 or W-2 or K-1 as soon as possible. Federal law requires that you get the W-2 by January 31, 2001. Most employers do OK with this deadline, but some don't. You should insist on it, so you can prepare your return.

2. Gather all your tax records in one place. If you've been doing this during the year, say in a folder marked “Taxes-2000,” you're ahead of the game. But if not, get started now. Find a folder, shoebox, dimpled chad container, whatever, and throw anything having to do with taxes in it.

3. On January 2, 2001, begin sorting through your records. Divide them into federal and state. Start with your own return (or joint return), then do the kids next. Using your 1999 return as a checklist and guide, make folders or envelopes of items of income, deduction (one envelope) for each one, and credit. If you use a tax prep service, or a CPA, enrolled agent, etc., do this anyway. It saves the preparer time and avoids errors. Also, you'd be amazed at how many records you DON'T have; you'll now be glad you have the time to get them.

4. If you pay estimated taxes, you will have a better handle on whether you need to pay in more to avoid the estimated tax penalty. Generally, if you pay in 100% of last year's taxes, you're OK, but that percentage can increase in some cases (say to 108%).

5. Finally, there are about 5-10 MILLION nonfilers out there, that is, people who owe one or more returns past any possible extension. How 'd that happen? They procrastinated, plain and simple. Then one year led to the next, etc. Don't be one of them. Best way to avoid such a problem (and it's a federal crime intentionally to fail to file) is to get a grip on year 2000 as soon as possible, that is, on January 2, 2001.

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