With the lean economy, sometimes it pays to learn to do things for yourself. Like fixing a leaky faucet instead of calling a plumber. Or changing your car’s oil yourself.
Another area where you can cut back is filing your tax return yourself instead of paying someone to do it for you. With all of the information available on the Internet, it’s easier than ever to file your own return.
Not only are there user-friendly software and sites that allow you to file returns electronically, there are a wealth of educational web sites where you may learn more about the filing process, the claims and deductions for which you may qualify, and download required forms.
When you use an online tax return program, all you have to do is answer questions. Your answers will automatically trigger more questions and forms to complete for the credits and deductions available to you—you don’t have to figure them all out for yourself.
Better yet, online access means no more trips to the library or post office to find they don’t stock or are out of the forms you need. Now, everything can be done at home. In fact, the IRS web site (www.irs.gov) has all the forms and publications you need, and it’s written in very user-friendly language with a comprehensive search engine to help you locate specific information.
File For Free
The IRS “Free File” program allows you to choose from a wide array of online tax prep software to prepare and file your federal tax return for free. Basically, the IRS formed a partnership with a group of private sector tax software companies to offer free or paid federal tax preparation and e-filing services to filers who earned a maximum AGI of $57,000 (some companies have set a lower income limit).
These authorized providers include programs from H&R Block and Turbo Tax. A complete list of providers is available at the IRS Web site (http://apps.irs.gov/app/freeFile/jsp/index.jsp?ck) and you’re free to choose from any one of them. Some companies charge a fee for state tax returns.
Free Tax Prep Assistance
This year, the IRS has also taken steps to help people who may have trouble paying their taxes because they’ve lost their job or have too many other hardship issues.
For starters, the IRS will host a series of Saturday “open houses” at their branch offices to work directly with taxpayers to answer questions and resolve issues. You may also ask questions about eligibility for special tax breaks under the 2009 American Recovery and Reinvestment Act, such as the Making Work Pay credit, homebuyer tax credit, the American Opportunity Credit, and the Expanded Earned Income Tax Credit.
“Times are tough for many people, and the IRS wants to do everything it can to help people who have lost their job or face financial strain,” IRS Commissioner Doug Shulman said. “We continue to make adjustments to key programs and expand ways for people to get help. We’re doing everything we can to help ease the burden on struggling taxpayers.”
IRS Taxpayer Assistance Centers will be open this Saturday, March 27, 2010, from 9:00 a.m. until 2:00 p.m. There will be additional Saturday open houses announced in the future. You can also call a toll-free number to ask questions and receive free help from IRS representatives. Check out http://www.irs.gov/localcontacts/index.html to find the location, telephone number, and business hours of the IRS office closest to you.
IRS Learns To Compromise
Taking its cue from the credit card industry, the IRS now has the authority and flexibility to actually offer a compromise between the amount owed in taxes and the amount a taxpayer must actually pay. To say this is a sign of the tough economic times is an understatement.
But to receive a compromise offer, filers will have to discuss their current and anticipated future income to negotiate a tailored solution. One potential requirement resulting from a negotiated compromise may be that you agree to make additional payments if and when your financial situation improves.
Additional services the IRS is offering include:
* The postponement of collection actions in certain hardship cases
* Added flexibility for missed payments on installment agreements
* Additional review of home values for offers in compromise in cases where real-estate valuations may not be accurate
* Accelerated lien relief for homeowners if a taxpayer cannot refinance or sell a home because of a tax lien
* Working in concert with state tax departments so that payment for both may be made at the same place
Information For the Unemployed
If you’re tired of surfing the Web trying to figure out what you need to file if you’ve been unemployed for the last year, the IRS has created a special page at its site so you can get the information you need straight from the horse’s mouth (http://www.irs.gov/individuals/article/0,,id=219269,00.html).
In many situations, tough times bring out the best in people. The best thing about learning to do your taxes yourself is that this is an educational experience you may build upon each year. What may at first seem intimidating becomes more commonplace each year, and you need only to learn any new tax updates and regulations.
With all of the online resources available today, and the new commitment from the IRS to work with American taxpayer’s during this time of hardship, your opportunities for learning and saving just got better.
For more information on filing your own taxes, check out the following Resources: