Prepare early...file??

The forms 1099 are on their way.  The annual rite of passage into tax season. You have already received some of them, and except for some brokerage houses, the rest should be arriving very shortly.  If you did a tax projection for yourself prior to the end of 2009 and you know you are getting a refund, file early.  It's your money. Get it back as soon as you can. If you have no idea whether you are getting a refund, prepare early. Don't be afraid that you might owe money and let that paralyze you. It's better to find out now than early or mid-April.  If you find out now that you owe Uncle Sam and Uncle Arnold or Uncle Deval or any of the other 41 Uncles who run states with income taxes, then you have about 10 weeks to save for it.  You don't want to get the surprise of owing tax dollars just prior to midnight on April 15 when there's nothing you can do about it.

WATCH OUT FOR PENALTIES

You can't decide at the last minute to file an extension because you owe the money, but don't have it. Please remember that an extension is just an extension of time to file, NOT an extension of time to pay.  If you think you owe it, the government wants it by April 15.  In fact, if you owe it, there's no good reason to give it to them any sooner than that. If you owe it and don't pay it, the government can charge you both penalties and interest.  If you owe taxes with your return and you simply do not have the money and you have no way of getting the money on time, file the return on time anyway.  There are penalties for late filing and for late payment. By filing on time, even without the money, you can avoid the late payment penalties.  You can also ask the government for a payment plan.  depending upon the amount you owe, you can attach a form requesting the payment plan. Otherwise, you can contact the IRS and they can help you set up a plan. With some states you can even request the payment plan on-line.

WHAT TO DO NOW

If you need forms or assistance preparing the returns, you should try the IRS website: http://www.irs.gov/
It has all the forms and instructions you need.  For now, assemble all of your information, making sure you have all items of income and expense accounted for.  All items of income should be reported, even those for which you do not get an official reporting form. Make sure you take all the deductions and credits to which you are entitled. See my top ten tax tips for some items you don't want to forget.