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SIERRA VISTA — Taxpayers who have lost a job, have less income or other changes in the past year may be able to get help from the IRS this filing season.
But they’ll have to get in contact with an IRS assister, said IRS Commissioner Doug Shulman.
“Taxpayers need to pick up the phone,” he said.
There are five ways the IRS will be helping taxpayers who owe back taxes, he said.
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If people can’t pay their taxes — whether they lost their job, have significant medical bills or face another hardship — relief may be available through postponed collection of their taxes.
A forgiven missed payment or a reduced monthly payment amount may be available to taxpayers who have an installment agreement with the IRS, he said.
The IRS also has the Offers in Compromise program for taxpayers in financial trouble.
“They can settle tax debt for less than the full amount due,” he said.
Sometimes a taxpayer’s home value prevents him from getting an “offer in compromise,” but applications rejected based on home equity can now be reassessed because of shifting home values, Shulman said.
Individuals facing trouble with their offer in compromise agreement can also contact the IRS for options to avoid default.
IRS employees will be able to expedite levy releases for taxpayers by easing requirements for those who request a release for hardship reasons. The IRS wants to speed up the process, “so people can pay their bills,” he said.
IRS assistance will be decided on a case-by-case basis.
“People who actually can pay still need to pay their taxes,” Shulman said.
However, free filing may be an option for almost anyone this year.
Anyone with an adjusted gross income up to $56,000 — about 98 million Americans — can use the standard free file options, and those with larger incomes may be able to use one of the 24 new free file electronic forms that taxpayers fill in online.
The forms may be right for those who file simple returns or who use electronic software to prepare the return but file using paper forms.
Filing taxes online can also be beneficial for anyone eagerly awaiting a tax return.
Those who file online and have their return direct-deposited into their bank account typically get returns within 10 days, compared to six weeks for paper-filed returns and a mailed check.
Taxpayers who earned less income in 2008 may be eligible for additional tax deductions and credits, like the Earned Income Tax Credit. Eligibility is determined by income and family size.
Taxpayers are advised to do their homework to find out if they are eligible for any tax benefits this year.
New tax benefits include:
• First-Time Homebuyer Credit: The credit of up to $7,500 works much like a 15-year interest-free loan. People who bought a main home recently or are considering buying one may qualify.
• The Recovery Rebate Credit: This credit will be similar to the economic stimulus payments. A taxpayer may qualify if he or she did not get an Economic Stimulus Payment, had a child in 2008 or had a change in income level.
• Standard Deduction for Real Estate Taxes: Taxpayers can claim an additional standard deduction, based on the state or local real estate taxes paid in 2008. The maximum deduction is $500, or $1,000 for joint filers.
Individual taxpayers won’t have any relief from the filing deadline, which is still April 15, Shulman said.
For tax information, visit IRS.gov or call (800) 829-1040.
10 tax time tips
1. Gather your records. It’s never too early to start getting together any documents or forms you’ll need when filing your taxes: Receipts, canceled checks, and other documents that support an item of income or a deduction you’re taking on your return. Also, be on the lookout for W-2s and 1099s, coming soon from your employer.
2. Find your forms. Whether you file a 1040 or 1040-EZ, you can download all IRS forms and publications on our Web site, IRS.gov.
3. Do a little research. Check out Publication 17 on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return. Review Pub 17 to ensure you’re taking all credits and deductions for which you’re eligible.
4. Think ahead to how you’ll file. Will you prepare your return yourself or go to a preparer? Do you qualify to file at no cost using Free File on IRS.gov? Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax preparation software or file online? There are many things to consider. So, give yourself time to weigh them all and find the option that best suits your needs.
5. Take your time. Rushing to get your return filed increases the chance you will make a mistake and not catch it.
6. Double-check your return. Mistakes will slow down the processing of your return. In particular, make sure all the Social Security Numbers and math calculations are correct as these are the most common errors made by taxpayers.
7. Consider e-file. When you file electronically, the computer will handle the math calculations for you, and you will get your refund in about half the time it takes when you file a paper return.
8. Think about Direct Deposit. If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a check by mail.
9. Visit IRS.gov often. The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, FAQs and updates on tax law changes.
10. Relax. There’s no need to panic. If you run into a problem, remember the IRS is here to help. Try IRS.gov or call our customer service number at 800-829-1040.
Source: IRS.gov
Q&A
IRS tax help: The “what-ifs” of an economic downturn
What if I lose my job?
The loss of a job may create new tax issues. Severance pay and unemployment compensation are taxable. Payments for any accumulated vacation or sick time also are taxable. You should ensure that enough taxes are withheld from these payments or make estimated tax payments to avoid a big bill at tax time. Public assistance and food stamps are not taxable. See the for more job-loss related tax issues.
What if I can’t pay my taxes?
Don’t panic. If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. In some cases, the agency may be able to waive penalties. However, the agency is unable to waive interest charges which accrue on unpaid tax bills.
What if I close my business?
If your business is no longer operating, you still are responsible for filing all required tax returns for your business by the due dates. In addition, if you had employees, you must file all required employment tax returns, including Forms 940, 941, 943 or 944. Both business and employment taxes should be paid when due. But, if you are not able to pay in full, contact the IRS immediately to discuss your options.
What if I lose my home through foreclosure?
Under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers generally can exclude income from the discharge of debt on their principal residence or mortgage restructuring. This exception does not apply to second homes or vacation homes. In some cases, you may be able to file an amended tax return for previous tax years.
What if I did not receive an economic stimulus payment?
If you had a change in income, a birth or adoption or failed to receive the stimulus payment in 2008, you may be eligible to receive the recovery rebate credit. The maximum credit is $1,200 for a married couple who earn less than $150,000. There also is a $300 credit for each qualifying child age 16 and younger.
Source: irs.gov
10 tax time tips
1. Gather your records. It’s never too early to start getting together any documents or forms you’ll need when filing your taxes: Receipts, canceled checks, and other documents that support an item of income or a deduction you’re taking on your return. Also, be on the lookout for W-2s and 1099s, coming soon from your employer.
2. Find your forms. Whether you file a 1040 or 1040-EZ, you can download all IRS forms and publications on our Web site, IRS.gov.
3. Do a little research. Check out Publication 17 on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return. Review Pub 17 to ensure you’re taking all credits and deductions for which you’re eligible.
4. Think ahead to how you’ll file. Will you prepare your return yourself or go to a preparer? Do you qualify to file at no cost using Free File on IRS.gov? Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax preparation software or file online? There are many things to consider. So, give yourself time to weigh them all and find the option that best suits your needs.
5. Take your time. Rushing to get your return filed increases the chance you will make a mistake and not catch it.
6. Double-check your return. Mistakes will slow down the processing of your return. In particular, make sure all the Social Security Numbers and math calculations are correct as these are the most common errors made by taxpayers.
7. Consider e-file. When you file electronically, the computer will handle the math calculations for you, and you will get your refund in about half the time it takes when you file a paper return.
8. Think about Direct Deposit. If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a check by mail.
9. Visit IRS.gov often. The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, FAQs and updates on tax law changes.
10. Relax. There’s no need to panic. If you run into a problem, remember the IRS is here to help. Try IRS.gov or call our customer service number at 800-829-1040.
Source: IRS.gov
Herald/Review reporter Laura Ory can be reached at 515-4683 or by e-mail at laura.ory@svherald.com.
