REASON #3: Having a balance due does not increase chance of audit.

If you have a balance due, you do NOT end up on some IRS "hit list." But for some reason there are many taxpayers who have this unfounded fear of owing money to government. This fear causes people to unnecessarily go to opposite extreme -- "I've got to make sure I never owe, so I'll just have way too much withheld to be safe."

Safe from what? This fear of an audit is pure hogwash.

REASON #4: Getting a large refund is usually a sign of poor (or non-existent) tax planning.

Many folks do not realize how easy it is to get out of "big refund rut".

You have control over how much you pay in to IRS during year. If you or your spouse are W-2 employees, you can change your withholdings very easily. Just file a new Form W-4 with your employer and you won't have to wait so long to get your money back.

If you are self-employed and making quarterly estimated tax payments, same principle applies. With a little number- crunching you can determine minimum amount of estimated tax payments you are required to make.

Whether you are self-employed or work for someone else, if you're not sure how to do these calculations, get help from your local tax professional.

REASON #5: Getting a large refund is usually a sign of poor (or non-existent) financial planning.

My client insisted that he needed a large refund so he could have a nice nest egg to look forward to every Spring. He was using government as his short-term savings plan.

I told Mr. Taxpayer this:

"If you want to save $5,000 dollars over course of year, just authorize your employer to deposit $100 per week into your savings account. Then at end of year, your $5,000 will be sitting in your own bank account instead of at U.S. Treasury.

And you won't be in such a frantic frenzy to get your tax return filed."

So I urge you to reconsider such an approach to money- management. Why let government have your money? Don't wait until end of year to get your money back. With a little planning and self-discipline, you can take control of this part of your life.

With a lingering recession, anemic job market, and rising property taxes and fuel bills, experts predict that many more people will default on their mortgage payments and face bank foreclosure action. Small business owners and contract freelancers are especially vulnerable to economic slump.

The Self-Employed 401k is a qualified retirement plan that can be set up by anyone who has a part-time or full-time business. This retirement plan is similar to 401k plans of large companies. The difference is that Self-Employed 401k is designed for an individual and as such is less complicated and less costly to maintain. Any person with a business with no employees can set up a Self-Employed 401k plan.

The cost and features of Self-Employed 401k plans will vary depending on plan vendor. A typical plan will cost less than $200 a year to maintain and allow loans with terms of 5 years or more at an interest rate close to prime rate. The good part is that all of your loan payments including interest go back to your 401k account. Take caution, however, because not paying your 401k loan on time will trigger IRS tax consequences as if your loan was a taxable distribution.

For more information or to obtain a Self-Employed 401k visit InvestSafe.com.