IRS Offers Tax Tips for Busy Alabama Taxpayers
With the April 15th tax deadline closing in, here are tips from IRS spokesman Dan Boone for busy Alabama taxpayers:
Don't miss out on the new Economic Stimulus Payment. Starting in May, the Treasury will begin sending economic stimulus payments, also called "rebates," to more than 130 million households. But if your 2007 return isn't processed until after April 15, your stimulus payment will be delayed. To receive a payment, taxpayers must have a valid Social Security number, at least $3,000 of qualifying income and file a 2007 federal tax return (state return not required). IRS will take care of the rest. Millions of retirees, disabled veterans and low-wage workers normally exempt from filing must do so this year to receive a stimulus payment. Visit the Economic Stimulus Payments Information Center at www.irs.gov for details or call the IRS "Rebate" Hotline at 1-866-234-2942.
Claim your 2004 refund before it expires. Nearly 21,000 Alabamians who failed to file an income tax return for 2004 are missing out on more than $16 million in unclaimed refunds. To collect the money, they must file their 2004 returns with the IRS no later than April 15, 2008, because the law provides most taxpayers with just a three-year window of opportunity for claiming a refund. Half of those who could claim refunds could receive more than $548.
Take advantage of free tax help sites. Free IRS volunteer-staffed tax help sites are open in 38 Alabama counties to assist taxpayers in preparing basic tax returns. Tax volunteers can be found at convenient neighborhood sites such as libraries, senior centers, churches or shopping malls. For the nearest help site, call the IRS toll-free at 1-800-906-9887.
Is there a secret formula to escape your taxes? Not likely. Don't fall prey to tax scams! Look on IRS.gov for the "Dirty Dozen" tax scam list which includes Phishing E-mails & Phone Calls, Tax Rebate Scams, Frivolous Arguments and Return Preparer Fraud.
Use Free File online at no cost. IRS Free File allows taxpayers earning $54,000 or less to e-file their tax returns for free, but only by going through IRS.gov. E-file is fast, accurate, dependable, and safe. And check out the Alabama Free File Alliance for your state return. E-file is fast, accurate, dependable, and safe. IRS uses the most secure technology available to safeguard your personal information. More than half a billion federal tax returns have been e-filed nationwide. Last year alone, 1.33 million returns were e-filed in Alabama (68% of all federal returns filed).
See if you qualify for the Earned Income Tax Credit (EITC). Lower-income workers may qualify for tax relief. Visit IRS.gov and use the interactive EITC Assistant to see if you do. Last year, nearly 489,000 Alabama taxpayers collected more than $1.11 billion in EITC payments. Up to 25 percent of Alabamians who qualify for the credit do not claim EITC, which could be as much as $4716. Use Free File or a volunteer-staffed help site to claim EITC.
Escape the late filing penalty. If you're just too busy to make the April 15 deadline, be sure to get a six-month extension to file (until October 15) by filing Form 4868 or by e-filing it from your computer or having your tax preparer file it. Or you can pay part or all of your estimated tax due using a credit card and an extension is filed for you automatically. You don't have to give a reason or excuse for requesting an extension, but it must be filed by midnight April 15.
Pay what you can, set up an installment agreement. If you owe taxes but can't pay the full amount when you file, do yourself a favor by paying as much as you can when you file. That limits the late-payment penalty and interest. To see if you qualify for one of the IRS payment plan options, check out the Online Payment Agreement link at IRS.gov. One option gives you 120 days to pay with no set-up fee.