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Author: Foolferlove Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 122643  
Subject: Borrowing from the IRS Date: 4/14/2008 6:58 PM
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Am I the only one who thinks this is a BAD idea?

Here’s how: Rather than file your return tomorrow, request an automatic extension for six months. With the extension request, you are supposed to pay what you estimate you owe, with penalties for underestimates. But if you come within 10 percent of the correct tax number, there is no penalty, just the interest charge.

Let’s say you owe total taxes of $100,000 this year, of which $80,000 was previously paid in withholding and estimated tax payments. Instead of filing a return Tuesday, file for an extension, and estimate you will owe a total of $90,000. Include a $10,000 check to bring the total paid to $90,000. Come Oct. 15, file your return showing the $100,000 tax owed, with a check for $10,000 plus the interest.

Result, you borrowed $10,000 from Uncle Sam for six months at a rate far lower than you would be likely to pay on any loan you got from your real bank.


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