Ten Ways to Avoid Trouble at Tax Time

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Looking for ways to avoid the last-minute rush for doing your taxes?

1. Organize Your Tax Records.  Tax preparation time can be significantly reduced if you develop a system for organizing your records and receipts.  Start with the income, deduction or tax credit items that were on last yearís return.

2. Donít Procrastinate.  Resist the temptation to put off your taxes until the last minute.  Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.

3. Take Advantage of Free Tax Assistance.  The Internal Revenue Service offers recorded messages on about 150 tax topics through its TeleTax service at 1-800-829-4477.  It also offers federal tax forms and publications at 1-800-TAX-FORM (1-800-829-3676).  Many post offices carry the most widely requested forms and instructions.  The Internal Revenue Service also staffs a tax help line at 1-800-829-1040, 7:00 a.m. to 10:00 p.m. on weekdays and 9:00 a.m. to 5:00 p.m. on Saturdays through April 13.

4. Visit the Internal Revenue Service Online.  Taxpayers accessed the Internal Revenue Service web site at www.Internal Revenue Service.gov more than 1 and a half billion times last year.  Anyone with Internet access can download tax forms, instructions and publications as well as tax law information and answers to frequently asked tax questions.

5. Use Internal Revenue Service Walk-In Sites and Volunteer Programs.  Forms, publications and tax help are available at more than 400 Internal Revenue Service offices nationwide.  Check your newspaper or local Internal Revenue Service office to find locations for Volunteer Income Tax Assistance and Tax Counseling for the Elderly sites.

6. File Your Return Electronically.  More than 40 million taxpayers filed their returns electronically. Aside from ease of filing, Internal Revenue Service e-file is the fastest and most accurate way to file a tax return.  If youíre due a refund, the wait time for e-filers is half that of paper filers.

7. Double-Check Your Math and Data Entries.  Review your return for possible math errors and make sure the names and identification numbers for yourself, your spouse and your dependents are correct and legible.

8. Have Your Refund Deposited Directly to Your Bank Account.   Another way to speed up your refund and reduce the chance of theft is to have the amount deposited directly to your bank account.  Check the tax instructions for details on entering the routing and account numbers on your tax return.

9. Donít Panic if You Canít Pay.  If you canít immediately pay the taxes you owe, consider some stress-reducing alternatives.  You can apply for an Internal Revenue Service installment agreement, setting your own monthly payment amount and due date, and getting a reduced late payment penalty rate.  You also have various options for charging your balance on a credit card, either as part of an electronic return or via a phone call to a processing agent.  Electronic filers with a balance due can file early and authorize the governmentís financial agent to take the money directly from their checking or savings account on the due date.

Note that if you file your tax return on time even if you canít pay, you avoid late filing penalties.

10. Request an Extension of Time to File.  If the clock runs out, you can get an automatic four-month extension of time to file, to August 15.  An extension of time to file does not give you an extension of time to pay, however you can call 1-888-796-1074, e-file a Form 4868 that is included in most tax preparation software, or send a paper Form 4868 to the Internal Revenue Service.  You will need the Adjusted Gross

Note that the extension itself does not give you more time to pay any taxes due.  Generally, you will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date.

 


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