Tax-filing anxieties? A few tips offer relief
What you don't know can hurt you - financially - when it comes to taxes. For example: If you want an economic-stimulus check, you have to file a 2007 tax return.
What you don't know can hurt you - financially - when it comes to taxes.
For example:
If you want an economic-stimulus check, you have to file a 2007 tax return.
Even if you normally don't.
That's true for many folks getting Social Security or veterans' benefits.
Most taxpayers need at least $3,000 in 2007 income to qualify, and Social Security recipients as well as veterans can count their payments to reach that threshold.
Also, couples filing jointly can get two $600 checks, while those filing separately will get only one between them, according to IRS spokesman David Stewart.
For more, go to
» READ MORE: www.irs.gov
and click on "Rebate questions?"
Here are more tax tips:
The IRS might owe you a refund from a previous year.
There is no penalty to file late if the government owes you money. But if that refund is for tax year 2004, you must file by April 15. In Pennsylvania and New Jersey alone, more than $80 million is owed to more than 85,000 people who never filed a 2004 return. For more, go to
» READ MORE: http://go.philly.com/refund
.
Don't overlook the earned-income tax credit.
Up to a fourth of those who qualify fail to take this credit, the IRS estimates. Yes, it is for workers in lower-income brackets, but a family of four could earn nearly $40,000 and get $4,700 back. Go to
» READ MORE: http://
go.philly.com/eic.
Save taxes now by adding to an IRA.
There is only one way to legally reduce your 2007 taxes now. That is by contributing to an individual retirement account. People under 50 can put up to $4,000 into an IRA, and those between 50 and 701/2 up to $5,000. Those over 701/2 are ineligible. In high-income brackets, your contribution will be reduced, and you even may be ineligible. Another kind of IRA, the Roth, is not deductible, but its earnings can grow tax-free. For more, go to
» READ MORE: http://go.philly
. com/taxira.
You may be able to prepare and e-file your tax return for free.
Through
» READ MORE: www.irs.gov
, you can find a list of tax-preparation companies that will help you do and e-file your federal taxes for free if your adjusted gross income is $54,000 or less. Some services do not even charge for state returns. Go to
» READ MORE: www.irs.gov
and click "Use Free File to Prepare Your Taxes."
For more free tax help, you have several options.
Generally,
» READ MORE: www.irs.gov
is the best place to get accurate information. It is always available, and you do not have to wait your turn. Individuals can get live help by calling 1-800-829-1040, toll-free, from 7 a.m. to 10 p.m. Monday through Friday. For recorded information, call 1-800-829- 4477.
To ask Dave Stewart of the IRS a question directly, or read his latest answers online, go to
» READ MORE: http://go.philly.com/taxes
.
Opt for direct deposit to get a faster refund.
Your refund should be in your bank account within 10 days if you choose direct deposit. "The check is in the mail" option can take four to six weeks if you e-file, six to eight weeks if you snail-mail your return. Payers need not fear identity theft, Stewart said. "It's very secure. We've never had our systems compromised."
Avoid dishonest preparers.
Taxpayers, not preparers, are ultimately responsible for each return. So check your return before signing it and question confusing entries. Never sign a blank return. Expect the preparer to sign it, too, and give you a copy for your records. Be wary of preparers who claim they can get bigger refunds, base their fees on refund amounts, or contend that phone customers can get hundreds of dollars in phone tax refunds, the IRS advises.
Be sure to have receipts and good records.
Deductions made without supporting evidence will be disallowed, possibly resulting in fines and interest. The IRS examined 1.4 million returns filed for 2006, about 1 percent of all returns.
If you can't file on time, ask for an extension and pay what you figure you owe.
Filing late when you owe money is like asking to be audited, some experts say. At the least, the taxpayer will face fines and interest penalties, Stewart said. If you are unsure how much you owe, paying as much as you did last year is a good rule of thumb for avoiding penalties, he said.
Filing for an extension, which gives taxpayers an extra six months, also puts the stimulus check on hold. The check will go out, Stewart said, after the return is filed.
Tax Day Countdown:
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