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News is not all bad as tax day looms

Filing is likely to be a bit easier this time and there's a good chance the bite will be gentler than last year.

By HELEN HUNTLEY
Published April 9, 2005


It looks like the weather will be great this weekend - except for those dark clouds hanging over the heads of people who haven't filed their federal income tax returns.

With Friday's deadline looming, millions of taxpayers are preparing to sprint to the finish line. Others, of course, are procrastinating.

"Folks who file at the last minute generally fall into one of three molds," said Nancy Wagoner, spokeswoman for the tax preparation chain H&R Block. "Either you're the procrastinator who always waits until the 11th hour to do anything, or you owe Uncle Sam and you're not going to give him a dime before you have to, or you still are legitimately waiting for tax documents to arrive."

If you're among the last-minute throng, take heart. Filing your taxes should be less taxing than it was last year if your financial situation has stayed about the same.

Most of the tax law changes are of the incremental variety, which makes filing less complicated. And there's a good chance you'll pay the IRS less money than you did last year. The average refund was $2,210 on returns filed through last week, up $110 from a year ago.

The most important change for Floridians is the new deduction for state and local sales taxes. If you saved your receipts, you can deduct actual sales taxes paid. Otherwise, you use an IRS table to determine your deduction based on income and family size. You can add to that number sales tax paid on a car, boat or building materials.

You get the deduction only if you itemize. But even if you normally take the standard deduction, adding the sales tax deduction to other deductions such as mortgage interest, real estate taxes and charitable contributions might make it worthwhile for you to itemize this year.

The simplest way to file taxes in a hurry is to do it online. You can even do it for free if you go through the IRS Web site (www.irs.gov) and click on "Free File." About 4-million taxpayers have used the free filing service this year. However, it's not for people who have complicated tax situations.

If you are self-employed or have complex investments, you may want to see a tax professional or buy tax software. Some companies that provide online filing also offer the option of a professional review.

This is likely to be the first year that most returns will be filed electronically. However, The IRS will be glad to accept a paper return if that's your preference.

If you need forms, you can print them from the IRS Web site, pick them up at an IRS office or order them by mail. Just don't count on mail-ordered forms arriving by Friday.

If you or your tax preparer can't get your return finished by April 15, file IRS Form 4868 to get a three-month extension of the deadline. The extension is automatic, but the IRS expects you to send in what you owe.

You can file Form 1127 to ask for more time to pay, but you'll have to convince the IRS that you're a hardship case and even if you are successful, the IRS will charge interest on the past-due amount.

Be sure to file a return even if you can't pay. There are separate penalties for not filing.

If you don't have the cash to send to the IRS, you have three primary options:

Borrow the money by applying for a loan or using a credit card to make your payment. The down side is you will have to pay interest and other fees. To pay by credit card (with a convenience charge) call Official Payments Corp. (1-800-272-9829) or Link2Gov Corp. (1-888-729-1040) toll-free.

Set up an installment agreement with the IRS (Form 9465) and take up to five years to pay. You will have to pay penalties and interest.

Pay as much as you can and wait until you get a notice from the IRS to pay the rest. You will have to pay penalties and interest, but if you pay the bill in full when you get the notice, you can avoid enforcement actions such as liens against your property and seizure of your bank accounts.

While it's on your mind, fill out a new W-4 form at work to adjust your withholding or increase your estimated tax payments so you won't be in the same fix this time next year.

If you find yourself with extra cash, consider making a 2004 contribution to an individual retirement account; Friday is the deadline. You can put away $3,000 plus an extra $500 if you are 50 or older. You must have had earned income.

Helen Huntley can be reached at huntley@sptimes.com or 727 893-8230.

WHERE TO GET ASSISTANCE

IRS TOLL-FREE NUMBERS

1-800-829-1040: ask questions (10 a.m. to 3 p.m. today, 7 a.m. to 10 p.m. Monday through Wednesday, 7 a.m. to midnight Thursday and Friday).

1-800-829-4933: ask questions related to business returns or accounts.

1-800-829-3676: request forms and publications by mail.

1-800-829-4477: listen to recordings on tax topics.

1-800-829-1954: check on a refund two weeks after electronic filing or six weeks after paper filing.

1-877-777-4778: resolve problems when other channels have failed.

1-888-796-1074: file for an extension. Have your 2003 return handy.

1-800-829-4059: use TTY/TDD machines

IRS OFFICES

9450 Koger Blvd., St. Petersburg, (727) 570-5552.

3848 W Columbus Drive, Tampa, (813) 348-1831.

Both are open from 8:30 a.m. to 4:30 p.m. weekdays. Phone lines offer recorded information.

Volunteers also are available to assist with tax preparation. For information about a location near you, call toll-free 1-800-829-1040.

WEB SITES

www.irs.gov: find forms, publications, answers to frequently asked questions and check the status of your return. There also are links to sites for free electronic filing.

www.sptimes.com/taxes: find a copy of the new sales tax deduction table with Tampa Bay tax information.

[Last modified April 9, 2005, 07:10:29]


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