Countdown to Tax Day – Last Minute Tips
(ARA) – This year, you have a few more days to file your tax return. Because April 15 falls on a Sunday and April 16 is a legal holiday in Washington, D.C., you have until April 17 to file your return (without requesting an extension). Despite the filing deadline being extended two extra days, millions of taxpayers are beginning to feel the pressure to finish their taxes.
According to the Internal Revenue Service’s (IRS) new filing statistics for the week ending March 16, 2007, 73 percent of the 136 million individual tax returns the agency expects to process have been filed. One of the biggest areas of growth is in returns filed electronically from home, which has grown more than 8 percent from last year.
As the tax deadline draws near, it is common to suffer from deadline anxiety. If you are one of the millions of taxpayers who have put off grabbing your 1040 form, the first rule is not to panic. Here are some last minute tax tips to consider:
- Crunch it with software. Tax software (online or the kind you install on your home computer) does more than calculate the financial data you enter.
According to Stephanie Behrends, spokeswoman for 2nd Story Software, Inc., makers of popular TaxACT tax preparation software and Web-based services, ‘One of the most important benefits that tax software provides is that it is up-to-date on all of the tax law changes. Coupled with a thorough interview format, tips and alerts systems, and easy-to-understand explanations, software like TaxACT reduces the likelihood for errors to occur — while maximizing the credits and deductions specific to your tax situation.’
Don’t have all your financial information yet? No problem. Not only does tax software offer do-it-yourself tax preparers the ability to stop and come back to the return you’ve begun to prepare; software also allows you to work on any part of your return — making it possible to prepare your taxes in stages.
- It pays to e-file and use direct deposit.E-filing eliminates most opportunities for mistakes and enables filers to receive their refunds faster. Better still, when coupled with direct deposit, you can receive your tax refund in as few as 10-days.
As of March 16, the IRS has reported it has direct deposited more than 42 million refunds, or 76 percent of all refunds issued this tax filing season — up from 71 percent of the total for the same period last year.
- Avoid common mistakes. Entering an incorrect tax amount you’ve transferred from documents can be costly — even software can’t predict the dollar amount reported in box 4 on your W-2. So double check your numbers after you’ve entered them. Other common errors include checking the wrong filing status and listing name changes that weren’t reported to the Social Security Administration. For example, if you were recently married last year, make sure the name you use to file your tax return appears as it is represented on your Social Security card.
- Telephone Excise Tax Refund.Due to a recent federal court decision, which held that tax does not apply to long-distance service as it is billed today, you may be eligible to receive a tax credit. If you’ve paid a long-distance phone bill in the last seven years, your credit could range anywhere from $30 to $60 if you claim the standard allowance.
- File an extension.If you’re concerned you won’t get your taxes in by the deadline, you can file for a six-month extension using Form 4868. If you don’t, you’ll pay a 5 percent penalty each month on any unpaid balance you owe the IRS. And remember, this is an extension for time to file, not to pay. So, you will need to estimate your taxes. If you determine that you have an amount owed to the IRS, you are obligated to remit payment to the IRS by April 17.
Looking for more tax tips? Need specific advice? Visit www.irs.gov/newsroom and, under ‘The News Room’ topics section, click ‘Tax Tips 2007.’ More information regarding TaxACT can be found by visiting www.TaxACT.com.
Courtesy of ARAcontent