In this episode of the Planned Solutions Incorporated Podcast, The US yield curve, the graphical depiction of US interest rates for different maturities, has inverted between the 2-year and 10-year maturities. Some argue that this signals a slowdown in the rate of US economic growth. However, historically the differential between the 2-year yield and the 10-year yield has been a poor indicator. Meanwhile, the more accurate difference between 3-month Treasury bills and 10-year Treasury bonds continues to signal strong economic growth over at least the next 12 to 18 months.
Also, As the Fed has increased short-term interest rates banks have been slow to respond by raising rates on money markets and CDs. However, US Treasury interest rates have increased so that in many cases they now exceed the yields offered by banks. In addition, Treasury interest is not subject to state incomes taxes making the after-tax yield even more attractive to investors in states with an income tax.
And, Taxpayers who need more time to file their 2021 income tax returns may file for an extension of time to file their returns. The IRS now offers multiple options to file an extension and make any necessary payments. This includes submitting a paper request for an extension of time to file or an electronic request using the IRS Direct Pay website. The IRS Direct Pay website also allows taxpayers to make electronic tax payments should there be an expected amount due.
Plus a look at the Planned Solutions Incorporated Office Bulletin Board- The 2021 personal income tax return deadline is right around the corner. Taxpayers have until April 18th to file their personal income tax returns or apply for an extension of time to file. However, an extension of time to file a tax return is not an extension of time to pay any tax that may be due. Therefore, taxpayers should complete as much of their tax return as possible before April 18th to determine if there is likely to be an amount due. If there is a projected balance owed a payment should be made with the request for an extension to file by April 18th. Taxpayers who file for an extension but fail to pay any tax due may be subject to a late payment penalty as well as interest on the amount due up until the date the tax is paid.
Now that tax season is nearing an end, many taxpayers are wondering how long they need to keep their tax records. For most taxpayers, the statute of limitations for the IRS to audit or make changes to their tax return is three years from the due date of the return or the date the return was filed, whichever is longer. Therefore, most taxpayers may destroy their records from the 2018 tax year after April 18th, 2022.
Chase Armer's book- Financial Planning Insights is now available at: www.amazon.com/Financial-Planning…1586894022&sr=8-1
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The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.
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