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IRA moves to make by Oct. 17

Welcome all my fellow tax procrastinators!

Back in the spring millions of us realized that we just weren't going to be able to get our tax acts together by the April 18 filing deadline (Friday the 15th was a holiday, pushing things back to the next Monday), so we asked the dear old IRS for some more time.

The taxman gave it to us, six more months to be precise.

Some of us only needed a week or two or a month at most to finish up our 1040s and associated schedules. 


We die-hard, hardcore tax procrastinators, however, are waiting until the absolute drop-dead date, which this year is Monday, Oct. 17, since the usual Oct. 15 deadline falls on a Saturday.

In fact, we take all of 2011's holidays and weekends that coincided with tax deadlines as a sign that we were supposed to wait.

But here's the ultimate signal: We must file our returns by Oct. 17.

That means by midnight if we're doing so electronically. Or if we're old school, we've got to have the envelope containing the paper forms postmarked by that day or face possible added penalties and interest.

Of course, if you don't owe, you're OK. The IRS calculates late-filing and late-payment charges based on the amount of tax due. And since we all paid what we figured we'd owe back when we got our extensions, we've got nothing to worry about, right?

Usually right.

But sometimes when we finally fill out the forms we find our math wasn't quite as accurate as we had hoped. So we need to get the forms in to turn off the fee meter.

Even if you don't owe anything, you want to be done with Uncle Sam for a while.

And if you're getting a refund -- yes, some people who get money back from the IRS still delay their filings -- the only way to get that money is to send in a final tax return.

Filing deadline countdown: Today here on the ol' blog I'm starting a new series that will help us all finish our filings.

October 17 countdown 10 Countdown to Oct. 17 will offer a tip for each of the next 10 days. For those counting back on the calendar, yes, that takes us to Sunday, Oct. 16. And yes, I know that technically we have most of the next Monday to file, too.

But I opted to end the 10-day countdown a day early to give us Monday, Oct. 17, for one final wrap-up and review.

So since the tax clock is ticking (and literally so over there in the left hand column), let's get to our first countdown tip. Actually it's a dual tip about IRAs.

Oct. 17 Countdown Tip #10A is recharacterize your Roth individual retirement account. This is your chance for a do-over if you converted your traditional IRA to a Roth and then realized that was not such a good idea.

Maybe your retirement account is now worth much less, meaning you'll owe taxes on the accounts higher value. To avoid that, you can change it back to a traditional IRA, but you must do so by Oct. 17.

Oct. 17 Countdown Tip #10B is for self-employed sole proprietors who got an extension. Contribute to your SEP IRA. This is the exception to the already generous IRA contribution rule, which usually gives you until the April filing deadline to set up and contribute to an IRA.

But if you're filing a Schedule C and get a filing extension, you get until the October deadline to establish and fund a SEP IRA.

This is why I put off my return this year. Back in April, I didn't have the amount I wanted to contribute, so I bought myself some contribution time by getting an extension.

And as a bonus, when I do fill out my 1040 I get to deduct as an above-the-line deduction the money I put into the SEP, thereby lowering my adjusted gross income and my ultimate tax bill by a bit.

If either IRA situation applies to you, take advantage of the Oct. 17 deadline to make the appropriate tax moves.

And I'll see all y'all back here tomorrow for Day 9's countdown tip.

More late-filing info: You also can read more about making the most of your extra tax-filing time in Bankrate's Tax Kit for October Filers.

It includes a new story I wrote on why we procrastinate when it comes to our taxes.

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