Tax day nears, are you ready?
A whopping one-third of Americans wait until this week to file their federal income tax. With the deadline coming Monday, the Internal Revenue Service had this advice:
• Special tax laws exist especially for military personnel and their families. Some of the major provisions include an extension of time to file – it can be 180 days or longer, tax-free combat pay, tax-free housing assistance payments, child and dependent care relief, liberalized laws for home sales and for Earned Income Tax Credit eligibility. Tax-free combat pay can now be used when applying for the earned income credit. Visit the armed forces Web page at http://www.irs.gov.
• The Katrina Tax Relief Emergency Act of 2005 contains several major provisions in the law to benefit those who were affected by the disaster and to taxpayers who helped those affected. The IRS Web site has details and there is also a toll free number for victims to get more information and help with tax matters: 1-866-562-5227.
• E-file is safe, accurate, fast and 54 million returns are filed by this method. Taxpayers get acknowledgment from IRS within 48 hours that the return has been received and refunds are issued within days – not weeks – by choosing direct deposit.
Taxpayers can file for free by accessing the Free File program at irs.gov. Link over to one of several software providers offering their services free of charge. The key stipulation for use is income of $50,000 or less.
• New this year is an automatic six month extension available to all taxpayers. It can be done by filing/mailing form 4868 or entering electronically via software. An extension only gives more time to file, not more time to pay. Taxpayers should make a good faith payment of 90 percent of taxes owed by April 17 to avoid possible penalties and interest. Last year’s return can serve as a good reference.
• No need to panic if immediate payment is not an option because the IRS will work with taxpayers. If the full amount owed cannot be paid immediately, taxpayers may request an IRS installment agreement or charge their balance due on a credit card.
• Many mistakes can be avoided. Incorrect, missing or transposed Social Security Numbers, math errors, failure to sign by both spouses if filing joint, credits and deductions figured incorrectly or the incorrect tax paid are avenues that can delay or reduce a tax refund. Preparing the return correctly the first time avoids correspondence from the IRS later.
• Check refund status by visiting “Where’s My Refund” at http://www.irs.go7v. Taxpayers access this secure Web site to find out if the IRS received and/or processed the return. Taxpayers need to know their Social Security number, filing status and the amount of the refund. To date, the Treasury has issued $155 billion in refunds with the average refund at $2,314.
• Taxpayers can find a wealth of information at the IRS Web site, or by phone from 7 a.m. to 10 p.m. at 1-800-829-1040. There are also dozens of Volunteer Income Tax Assistance sites throughout Nevada where lower income, elderly, or those who speak English as a second language can get free tax return preparation.