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Reminders for Last-Minute Tax Filers

With the April 15 tax filing deadline right around the corner, the Internal Revenue Service offers taxpayers who have not yet filed a few last-minute tips.

 

Don’t Miss the Tax Deadline

If you have a balance due and don’t file a tax return by April 15, you face interest on the unpaid taxes as well as a failure-to-file penalty. Interest and penalties are added to your balance due. If you can’t file by the deadline, request an extension of time to file (see below).

If you file on time or request an extension but don’t pay all or some of the balance due by the deadline, you will incur interest on the unpaid amount and a failure-to-pay penalty. If you can’t pay the full amount, you should pay as much as possible by the deadline to minimize interest and penalties.

 

Get Recovery Tax Breaks

Last year’s American Recovery and Reinvestment Act created a full slate of tax breaks, which can be claimed on tax returns right now. These include:

  • The Homebuyer Credit
  • Making Work Pay Credit
  • American Opportunity Credit
  • Home Energy Credit
  • New Car Tax and Fee Deduction

You can get information on these and other Recovery credits at IRS.gov/recovery.

 

File Electronically

Most tax returns are now filed electronically – either from home using purchased tax software, by a tax professional or through Free File.

There are several reasons the IRS encourages taxpayers to file electronically. Here are two big ones:

  • E-file is accurate: Most available tax preparation programs check for errors and missing information, reducing the chances of delayed refunds or follow-up correspondence from the IRS.
  • E-file is fast: With most tax software, you can file a state tax return at the same time you file your federal return. Once a return is accepted for processing, the IRS electronically acknowledges receipt of the return. And refunds take only about half the time of a paper return. If you choose direct deposit, you will get your refund in even less time.

 

Try Free File

Free electronic filing is available to everyone.

Traditional Free File is software with step-by-step help available to anyone whose 2009 adjusted gross income was $57,000 or less. The only way to access Free File is through the IRS Web site, IRS.gov. As the name implies, there is no charge for this service.

For those whose incomes exceed $57,000, there is Free File Fillable Forms. Free File Fillable Forms, also available through IRS.gov, allows a taxpayer to fill out and file tax forms online. You enter the necessary information, sign electronically, print the return for recordkeeping and then e-file the return right to the IRS. Since there is no step-by-step help, Free File Fillable Forms may be best if you are comfortable with the tax law and know which forms to choose.

 

Choose Direct Deposit for Refunds

Whether you file electronically or on paper, your refund can be automatically deposited into the bank or financial account of your choosing. Direct deposit is faster than a paper check. If you e-file and use direct deposit, you will receive your refund even faster. Direct deposit is also more secure than a paper check since a direct deposit goes directly into your account and cannot be lost in the mail or stolen.

Split Refund: Refunds can be direct-deposited into as many as three different accounts. Most e-file and tax preparation software allow you to “split” your refund this way. Paper return filers need to file Form 8888, Direct Deposit of Refund to More Than One Account, to split a refund among two or three accounts.

Buy Savings Bonds: This year, for the first time, you can buy Series I U.S. Savings Bonds with your refund. Issued by the Treasury Department, a Series I bond is a low-risk investment that grows in value for up to 30 years.

 

Check for Tax Errors

Tax software finds common errors on electronically prepared returns. However, if you file on paper, you can avoid delays in processing and follow-up questions from the IRS by:

  • Double-checking all figures
  • Ensuring Social Security numbers are correct
  • Signing forms where required
  • Attaching required schedules and forms
  • Mailing returns or request extensions by the April 15 filing deadline

 

Pay Electronically

Electronic payment options are safe and secure methods for paying taxes or user fees. You can pay online, by phone using a credit or debit card, or through the Electronic Federal Tax Payment System.

You may also pay by check made out to the “United States Treasury” using Form 1040-V, Payment Voucher, which must be included along with your tax return. If you have already filed but still need to pay all or some of your taxes, mail the check to the IRS with Form 1040-V.

 

Request an Extension of Time to File

If you can’t meet the April 15 filing deadline, get an automatic six-month extension of time to file by filing Form 4868, Automatic Extension of Time to File. The form needs to be submitted by April 15.

There are several way you can request an extension, including Free File or Free File Fillable Forms, through your tax professional, with tax software you installed on your computer or on paper.

An extension pushes your filing deadline back to Oct. 15. However, an extension of time to file is not an extension of time to pay. If you owe taxes, you need to pay at the time you file the extension or face a non-payment penalty.

 

Apply for an Installment Agreement

If you can’t pay your entire balance due, an installment agreement will allow you to pay any remaining balance in monthly installments. If you owe $25,000 or less, you may apply for a payment plan using the Online Payment Agreement application or just attach Form 9465, Installment Agreement Request, to the front of your return. You’ll need to list the amount of your proposed monthly payment and the date you wish to make your payment each month. The IRS charges $105 for setting up the agreement, or $52 if the payments are deducted directly from your bank account.

You will be required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month after the due date that the tax is not paid.

 

Tax Help Is Available

For more information about filing and paying your taxes, visit 1040 Central on IRS.gov. Important information is also available in Publication 17, Your Federal Income Tax. Forms and publications are available for download from IRS.gov or can be ordered by calling toll free 800-TAX-FORM (800-829-3676).

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Top Ten Tips for Last Minute Filers

With the tax filing deadline close at hand, here are the top 10 tips the IRS wants you to know if you are still working on your federal tax return.

  1. E-file your return Don’t miss out on the benefits of e-file. Your tax return will get processed quickly if you use e-file.  If there is an error on your return, it will typically be identified and can be corrected right away.  E-file is available 24 hours a day, seven days a week, from the convenience of your own home. If you file electronically and choose to have your tax refund deposited directly into your bank account, you will have your money in as few as 10 days. Two out of three taxpayers, 95 million, already get the benefits of e-file.
  2. Review tax ID numbers Remember to carefully check all identification numbers on your return. Incorrect or illegible Social Security Numbers can delay or reduce a tax refund.
  3. Double-check your figures Whether you are filing electronically or by paper, review all the amounts you transferred over from your Forms W-2 or 1099.
  4. Review your math Taxpayers filing paper returns should also double-check that they have correctly figured the refund or balance due and have used the right figure from the tax table.
  5. Sign and date your return Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.
  6. Choose Direct Deposit To receive your refund quicker, select Direct Deposit and the IRS will deposit your refund directly into your bank account.
  7. How to make a payment People sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to, the tax return or the Form 1040-V, Payment Voucher, if used. Write your name, address, SSN, telephone number, tax year and form number on the check or money order. If you file electronically, you can file and pay in a single step by authorizing an electronic funds withdrawal. Whether you file a paper return or file electronically, you can pay by phone or online using a credit or debit card. Visit IRS.gov for more information on payment options.
  8. File an extension Taxpayers who will not be able to file a return by the April 15 deadline should request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.
  9. Visit the IRS Web site anytime of the day or night IRS.gov has forms, publications and helpful information on a variety of tax subjects.
  10. Review your return…one more time Before you seal the envelope or hit send, go over all the information on your return again. Errors may delay the processing of your return, so it’s best for you to make sure everything on your return is correct.

 

Top Ten Tips for Last Minute Tax Filers

  • Form 9465, Installment Agreement Request (PDF 100K)
  • Form 1040-V, Payment Voucher (PDF 47K)
  • Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return (PDF 50K)