The due date for your federal and state income tax returns is just a little more than a month away. There are several reasons why you should consider filing later rather than sooner.

• The IRS has extra employees available for audits during the peak season.
• The IRS has a quota for auditing certain types of returns each year. The later you file the more likely that quota will have been met, and the fewer employees they will have available to scrutinize your return. That doesn't mean that you should be anything but completely honest when filing your return, but even honest taxpayers are greatly inconvenienced by an audit.
• You give yourself more time to receive documents and remember everything that should be included, thus avoiding having to file an amended return.

The most common reason for wanting to file early is because a taxpayer is expecting a refund and doesn't want to wait for the money. Creative use of your company's payroll department will let you get to that money before you file your return.

To file an extension you will need to complete and mail in form 4868. It is a simple one page form. You can fill it out on your screen, print it out, and mail it in. In Georgia, a state extension is granted automatically if you receive a federal extension. Other states may vary. Don't want to bother with the postal service? Taxact.com will allow you to e-file your federal return free, regardless of income. Even if you don't plan to complete your final return with them, you can e-file your extension with them, and do your final return by hand, with another software program, or have it done by a professional.

Be sure and estimate your tax liability a little high on your extension, and file the extension and pay your estimate by April 15. Form 4868 only gives you extra time to file. It does not give you extra time to pay.

I have several clients who email me their paper work each year for me to prepare their returns. More often than not there is something missing and I have to call or email them to ask about the missing information. I have to confess I've even filed incomplete returns for myself, and had to amend them later to add the missing information.

There is an article on the Remember the Milk blog today about using this online task management list to make sure you have all your documents together before you either send them off to your preparer, or sit down to prepare your own return. I'm a big fan of Remember the Milk, but I've never used it for this. I may start next year though.

Leave a comment and let me know how you organize for tax season.

The last two years I did taxes free each Saturday in February as a ministry to low income and elderly members of the community. I'm still willing to do that this year on an appointment basis, but didn't make a point to give away my Saturdays. One lady called me about a month ago looking for a copy of her 2008 return because she needed some information off of it to do her 2009 taxes at Turbotax.com.

I told her I'd be glad to get her a copy of last years's return, but asked why she was paying to use Turbotax when I'd done her return for free (actually, I did charge enough to cover my electronic filing fees, about $12). She said since I wasn't doing it on Saturdays she thought I was too busy and she didn't want to bother me. When I told her I was willing to do it, she was very relieved because she'd been getting frustrated using Turbotax.  That's not a slam of Turbotax, some people just still want a person to help.

She agreed that it would be fair to pay me what she was going to pay Turbotax if she'd done her return online. That was about $55 for a federal and state return. I don't know if I could do that for everybody, but I can do it for you. By the way, she threw in a $15 tip because she was so happy to be rid of the hassle. She didn't have to do that, but it was greatly appreciated.''

The drama in Washington never seems to stop over health care. And if getting health care legislation depends on getting Republicans and Democrats to find common ground, then it's a dream at best. I'm a firm believer that what makes the United States great is that the people are independent and do not wait on the government to take care of them, but are determined to take care of themselves. With that in mind, let me suggest how you should write your own health care bill.

Get Health Insurance When You Don't Need It
One of the biggest issues is the inability to get coverage for pre-existing conditions. Some want to make insurance companies out to be evil villains for not covering these conditions, but it really just makes sense that they wouldn't. The purpose of an insurance company is to take on part of your risk in exchange for your premiums. So when you are healthy you pay the insurance company to cover you in the event you develop cancer, heart disease, diabetes, or any of a number of ailments. If people don't get insurance when they are healthy, and then come seeking a policy when they have a condition, it's no longer a risk, it's a certain liability. This is the reason that the democrats insist on mandating coverage if they are going to require insurance companies to cover people with pre-existing conditions. It keeps people from gaming the system by waiting until they are less healthy to buy insurance.  Thank goodness we still live in a free country where you are not (yet) mandated to buy insurance if you don't want it. However, having the freedom not to buy doesn't make it smart.

Understand the purpose of Health Insurance
There is a perception in our nation that the purpose of Insurance is to pay your health care costs. Just seems obvious, that's why it's called Health Insurance, right?  Wrong. Remember, the purpose of buying insurance is to pay someone else to protect you from a risk. If we want to be healthy, we plan to have regular checkups, dental cleanings, eye exams, etc.  And we expect some minor illnesses in our family each year. Those are not risks, those are reasonably planned expenses. One of the reasons health care insurance has become so expensive is that we expect it to pay for expenses we know we will incur. That really isn't a good use for insurance. It comes from an idea that says I'm not responsible for my own expenses, I want someone else to take care of me.

The real purpose of health insurance is not to pay for your health care, it is to protect your assets. That is, if you have catastrophic expenses, you would not want to lose your home, or your retirement nest egg, to have to pay medical bills. This is why I'm a big believer in a high deductible insurance plan. This plan means I'm not likely to cost the insurance company anything as long as I am just getting routine medical care and treatment for minor illnesses and injuries. As such they can charge me much lower premiums.

Become Self-Insured
Take the savings from those lower premiums and put them in a tax sheltered Health Savings Account (HSA). For a person in a 15% federal and 5% state income tax bracket you will save 20 cents in taxes on every dollar you put into your HSA. So if your premiums are going to be $200 per month lower for your high deductible policy than for a traditional policy, you could afford to put $240 ($200 + $40 in tax savings) per month in your HSA. Also consider how much your deductible would have been on the traditional plan. If you would have had a $500 deductible, then that's money you would have spent anyway. If you put that $500 plus another $100 in tax savings into your HSA, you now have it up to $290 per month with just money you were already going to spend. But it gets better than that. How much do you spend out of pocket each year for over the counter medications, eyeglasses, dental visits, and other cost not covered by your medical insurance?  All of that can be paid from your HSA also. If you spend $600 a year (to make the math easy) that's another $60 a month you can put in your HSA ($50 expenses and $10 in tax savings). That brings your total up to $350 per month, $4,200 per year, that you can put into your HSA. As long as your medical expenses are not catastrophic, this will more than cover the size deductible required become eligible for one of these plans. If you do have a catastrophic event, that's what the insurance is there for.

If you can afford to pay for routine visits, over the counter medications, etc. without tapping into this account, so much the better. It grows tax free and will give you a great safety net in the future. If you need it though, it's always there. If you can afford to put more than just what you are saving by switching to a high deductible plan in it, by all means do so. The limit for a family is $6,150 in 2010.

Plan for unemployment
One of the great things about the HSA is that it can be used to pay insurance premiums on COBRA. COBRA allows an employee to keep their insurance for a period of time after leaving their employer, but they must pay the premiums out of pocket. If you lose your job due to a layoff, it's difficult enough to pay ordinary living expenses, much less the full premium that previously was paid by, or at least subsidized by, your employer. Switching to a high deductible plan with an HSA now allows you to begin building cash reserves that could help you pay those premiums until you find other employment. This not only keeps you insured in the short term, it helps avoid becoming uninsured and getting caught in that "pre-existing condition" trap.