As 2010 earnings statements are received and reviewed, some workers will rush to file their taxes in expectation of a refund.
By CHARLENE CROWELL
As 2010 earnings statements are received and reviewed, some workers will rush to file their taxes in expectation of a refund. But, in 2011, the ways to better assure fast and accurate refunds are changing. The Internal Revenue Service (IRS) is also modifying its procedures and services to encourage both online electronic filing and direct deposits for the 140 million individual tax returns expected this year.
What’s New in 2011
For the first time, IRS will not mail tax packages to individuals or businesses. Printed forms will be available at local IRS offices, libraries and post offices. Forms are also available online at: http://www.irs.gov/formspubs/index.html.
Due to the observance of Emancipation Day on April 15, the traditional IRS deadline, this year’s filing deadline will be Monday, April 18.
Taxpayers requesting an extension will have until October 17 to file returns.
If you are a taxpayer wanting to itemize deductions on IRS’ Form 1040, wait a few weeks to file. Late enactment of changes to the tax code will mean that these changes are expected to be ready by late February. Three specific types of eligible deductions are affected by this delay:
Schedule A – listing varied deductions that span mortgage interest, charitable donations, medical and dental expenses, as well as state and local taxes;
Higher Education Tuition and Fees Deduction (Form 8917) – covers up to $4,000 in tuition and fees paid to post-secondary institutions; and
Educator Expense Deduction – for K through 12 educators who incurred up to $250 in out-of-pocket classroom expenses.
Many parents and higher education students may be able to take advantage of the American Opportunity Credit, an annual $2,500 credit for students enrolled in a four-year college. The full credit is available for taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less ($160,000 or less for filers of a joint return).
The credit is reduced or eliminated for taxpayers with incomes above these levels.
A number of other tax credits are available for energy efficiency, graduate students, first-time homebuyers and more. The best way to determine eligibility on all available credits is to work with a licensed tax professional while preparing returns.
Free and Low-Cost Tax Services
In 2011, low to moderate income earners and the elderly also benefit from a range of services – many of them free.
Free Low-Income Tax Clinics are available in every state for people meeting the income threshold of 250 percent of poverty. In everyday language, that means that a single filer may earn up to $27,075; a family of four’s household earnings could be as much as $55,125.00. Many of these clinics also offer Spanish-language assistance. To locate a nearby free clinic, visit http://www.irs.gov/advocate/content/0,,id=151026,00.html.
Taxpayers earning $49,000 or less can receive free tax preparation and in many cases, free electronic filing through the Volunteer Income Tax Assistance Program. To locate a local service site, dial toll-free at 1-800-829-1040.
Since 1978, taxpayers aged 60 and older have had specialized services through Tax Counseling for the Elderly. Trained volunteers from local nonprofit organizations provide tax counseling and basic income tax preparation. This program also emphasizes services to minorities and the disabled. Another specialized service for older citizens is available through the AARP Foundation.
AARP’s Tax-Aide program provides free services for low and moderate income filers; it is also the nation’s largest free and volunteer-staffed tax preparation service. To learn more about AARP’s tax services visit:
Military personnel and their families also have a specialized free program, The Armed Forces Tax Council (AFTC) with tax program coordinators for the Army, Air Force, Navy, Marine Corps, and Coast Guard. The AFTC oversees the operation of the military tax programs worldwide, and serves as the main conduit for outreach by the IRS to military personnel and their families. IRS also has a printable guide for military members and their families at:
Lastly, anyone, regardless of income, may use IRS Free File, free brand-name software with forms that can be completed online and electronically filed free.
With these and other credible and free tax services, no tax filer should feel forced to take out a costly short-term loan just to get a tax refund. Remember – Refunds are monies already earned; they should also be yours to keep.