Last-Minute Tax Questions
On The Saturday Early Show on CBS, I offered some last-minute help for those who've yet to file their 2010 taxes. In case you missed the segment, here are the key points.
If I haven't done my taxes yet, what should I do?
Hurry up and file or file for an extension. The deadline to file is April 18 this year -- but if for whatever reason you are unable to make that deadline you can file for a free 6-month extension for both your federal and state tax returns.
For your federal extension, fill out form 4868 from the IRS's web site at IRS.gov. For your state return, visit your state government's web site, where you should find directions on how to fill out an extension request. Just remember that a paperwork extension doesn't mean you can stave off payment: You need to pay the IRS anything you owe by that April 18 deadline or face stiff late penalties and fees. You can either make a good faith estimate and pay 90% of that, or pay 100% of what you paid last year. Note: The penalty for not paying your taxes on time starts at 5%.
What if I need help filing my taxes but can't afford a professional?
Remember that the IRS is here to help everyone - whether it's by phone, in person or on the web. The IRS has taxpayer assistance centers all over the country; you can find locations and phone numbers through its Web site. There's also the Volunteer Income Tax Assistance Program, a group of volunteers backed by the IRS that help low to moderate-income tax individuals and families prepare their tax returns. The IRS also has free assistance programs for the elderly and for military families.
I've complete my tax return, but don't have enough money to pay. What now?
The IRS does have installment plans for those who cannot pay their taxes in one lump sum. The interest rate is 0.5% per month â€"- better than an average credit card, and much better than a payday loan. Fill out the IRS' online payment application. Note: There is a fee to apply, from $52 if you pay online to $105 if you pay through the mail.
What's the best way to receive my refund?
If you're interested in getting paid ASAP (and who isn't?), I suggest selecting direct deposit. It's not only the fastest way to get your refund; it's also the safest. If you file online and choose direct deposit you can expect your refund in as few as 10 days -â€" less than two weeks. It's no wonder 73 million Americans opted for direct deposit last year.
How can I check the status of my refund?
According to the IRS Web site, once taxpayers file their federal return, they can track the status of their refunds by using the "Where's My Refund?" tool, located on the front page of www.IRS.gov. Taxpayers can generally get information about their refunds 72 hours after the IRS acknowledges receipt of their e-filed returns, or three to four weeks after mailing a paper return. There's also a new smartphone app this year called IRS2GO, which lets taxpayers check on their status of their tax refund on the go.
Final Tip: Don't forget to keep a copy of your return. The IRS typically audits filers within a three-year window. So it's important to file and store your tax paperwork, including related receipts and documents. Your return will also come in handy next year if you need to file an extension -- to estimate your payment, you can refer back to 2010's figures.
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