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10 tips: How to take the pain out of filing taxes

By HELEN HUNTLEY
Published February 17, 2008

Here's how toTake the pain out of taxes

We can't claim we'll make tax time fun, but we can offer some ways to make it less painful. The goal is to file a return that's complete and accurate, and, of course, takes advantage of all the tax breaks Uncle Sam is willing to give you. Here are some tips for success:

1 Get organized. Hunt down those W-2s and 1099s and the receipts supporting deductions before you start your return. Review them for accuracy and call the issuer with any questions.

2 Missing a W-2 or 1099 form? Call the company. If that doesn't work, call the IRS toll-free for help at 1-800-829-1040. You may need to file Form 4852 as a substitute. The numbers you need may be on your final pay stub or statement for the year.

3 File for free. If you have a computer connected to the Internet, you can file electronically through IRS Free File if your adjusted gross income is less than $54,000. Go to www.irs.gov for a list of companies and their requirements. Or get help in person if you are 60 or older or have a modest income. Call the IRS for a free tax-preparation site near you.

4 Get up to date. If you use tax software, download the latest update. If you prepare a paper return and you are affected by the alternative minimum tax or received a 1099 for mortgage debt forgiveness, do some research or get help to avoid paying too much in taxes. Rules for both were changed after paper returns and instructions were printed.

5 Be precise. Names and Social Security numbers for everyone on your return should match Social Security records. Take Social Security cards with you if you use a tax preparer. Wrong information will delay your refund.

6 Check last year's return. It may remind you of deductions you've overlooked. Also check for carryovers from last year, such as capital losses and excess charitable contributions you weren't able to deduct previously.

7 Low-paying job? If you are between 25 and 65, you may qualify for the Earned Income Credit with income of up to $12,590 (if childless) to $39,783 (with two or more children). You can get the money even if you don't owe taxes.

8 Save for retirement. You have until April 15 to make a 2007 IRA contribution of up to $4,000 if you are younger than 50 or $5,000 if you are 50 or older. Depending on your income, you may be eligible to deduct your contribution or get the retirement savings contribution credit.

9 Check your math. If you are doing a return on paper, get out the calculator. Also, be sure you copied the right number from the taxtable.

10 Settle up. If the IRS owes you, have your refund direct deposited for the quickest turnaround. If you owe the IRS, you can file now and mail your check (payable to U.S. Treasury) later. Payment is due April 15, but even if you can't pay, file a return to avoid additional penalties. Ask for an installment plan (Form 9465) if you can't pay in full.

Helen Huntley, Times personal finance editor

Sources: IRS (www.irs.gov), CCH (www.cch.com) and Times research.

[Last modified February 15, 2008, 18:16:26]