SHP_Financial_Logo_Square_FBIn a 1789 letter to Jean-Baptiste Leroy, Ben Franklin wrote, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

It’s interesting that while the Constitution has changed only minimally since 1787, the tax code changes all the time.

Now that we’re well and through this year’s April 15 tax deadline, hopefully you are one of the 113 million who filed your return on time and paid any taxes owed. If not, you at least should have filed for a tax extension for your 2014 federal income tax return. Bear in mind that, even if you filed for an extension, any amount you may owe was still due on April 15. Otherwise, the very next day the clock started ticking and penalties and interest will accrue on any outstanding amount you owe.

  • Late filing penalty: Typically five percent of the tax bill for each month (or part of a month) that the return is late, up to 25 percent of the tax bill
  • Late payment penalty: Typically 0.5 percent of taxes owed for each month after April 15
  • Late payment interest: The interest rate equals the federal short-term rate plus 3 percent (set quarterly)

[CLICK HERE to read the article, “The Quotable Franklin,” from, accessed April 24, 2015.]

[CLICK HERE to read the article, “IRS Reports Tax Filing Numbers as Expected, Issues Statement on Refund Delays,” from Forbes, April 21, 2015.]

[CLICK HERE to read the article, “It’s Tax Day. You haven’t filed. Should you freak out?” from The Washington Post, April 15, 2015.]

If you haven’t paid what you owe yet, consider your options. You can set up an installment payment plan with the IRS. If you do so, the late penalty drops to 0.25 percent per month, and you get as long as six years to pay off the debt. Remember, though, interest will continue to accrue until the balance is paid.

[CLICK HERE to read the article, “Apply for an Online Payment Agreement for Individuals and Businesses,” from, April 16, 2015.]

If you charge what you still owe to a credit card, pay careful attention to the fees involved. For example, charging your payment to a debit card may cost a flat fee of $2.49 to $3.50. However, if you charge it to your credit card, your fee can range from 1.87 percent to 2.35 percent of the amount you charge. With a large tab, say $10,000, that’ll tack on as much as $235 — and that doesn’t even take into account the interest you’ll pay until the credit card charge is paid off. The good news? You can deduct that initial fee on next year’s return.

[CLICK HERE to read the article, “Pros and cons of paying taxes with a credit card,” from, March 20, 2015.]

[CLICK HERE to read the article, “Pay your Taxes by Debit or Credit Card,” from, Jan. 15, 2015.]

If you did get your return filed in time and you’re all square on tax payments, good for you. However, it’s never a good idea to just slap your hands clean and wait until next year. There are moves you can make now to help lower your tax liability for next year. For example, you can max out your contributions to tax-advantaged retirement and health care savings accounts. And consider the merits of tax diversification — which basically means having both a retirement income source that is currently tax-deferred and one with distributions that won’t be taxable in retirement.

[CLICK HERE to read the article, “4 moves to make now to cut your taxes for 2016,” from USA Today, April 5, 2015.]

There are many ways to help increase your current income and help develop more tax-efficient income strategies — whether for next year or in retirement. Please contact us for help tailoring a strategy that works best for your individual situation.

We are an independent financial services firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Our firm is not permitted to offer, and no statement contained herein shall constitute, tax, legal or investment advice. Be sure to speak with qualified professionals before making any decisions about your personal situation. Our firm is not affiliated with the U.S. government or any governmental agency.

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