The Internal Revenue Service today
urged taxpayers whose tax-filing extension runs out on Oct. 15 to double check
their returns for often-overlooked tax benefits and then file their returns
electronically using IRS e-file or the Free File system.
Many of the more than 12 million
taxpayers who requested an automatic six-month extension this year have yet to file. Though Oct.
15 is the last day for most people, some still have more time, including
members of the military and others serving in Afghanistan or other combat zone localities who typically have until
at least 180 days after they leave the combat zone to both file returns and pay
any taxes due. People with extensions in parts of Colorado affected by severe storms, flooding,
landslides and mudslides also have more time, until Dec. 2, 2013, to file and
pay.
Check Out Tax Benefits
Before filing, the IRS encourages
taxpayers to take a moment to see if they qualify for these and other
often-overlooked credits and deductions:
- Benefits for low-and moderate-income workers and families, especially the Earned Income Tax Credit. The special EITC Assistant can help taxpayers see if they’re eligible.
- Savers credit, claimed on Form 8880, for low-and moderate-income workers who contributed to a retirement plan, such as an IRA or 401(k).
- American Opportunity Tax Credit, claimed on Form 8863, and other education tax benefits for parents and college students.
- Same-sex couples, legally married in jurisdictions that recognize their marriages, are now treated as married, regardless of where they live. This applies to any return, including 2012 returns, filed on or after Sept. 16, 2013. This means that they generally must file their returns using either the married filing jointly or married filing separately filing status. Further details are on IRS.gov.
E-file Now: It’s Fast, Easy and
Often Free
The IRS urged taxpayers to choose
the speed and convenience of electronic filing. IRS e-file is fast, accurate
and secure, making it an ideal option for those rushing to meet the Oct. 15
deadline. The tax agency verifies receipt of an e-filed return, and people who
file electronically make fewer mistakes too.
Everyone can use Free File, either
the brand-name software, offered by IRS’ commercial partners to individuals and
families with incomes of $57,000 or less, or online fillable forms, the
electronic version of IRS paper forms available to taxpayers at all income
levels.
Taxpayers who purchase their own
software can also choose e-file, and most paid tax preparers are now required
to file their clients’ returns electronically.
Anyone expecting a refund can get it
sooner by choosing direct deposit. Taxpayers can choose to have their refunds
deposited into as many as three accounts. See Form 8888 for details.
Of the nearly 141.6 million returns
received by the IRS so far this year, 83.5 percent or just over 118.2 million
have been e-filed.
Quick and Easy Payment Options
Taxpayers can e-pay what they owe,
either online or by phone, through the Electronic Federal Tax Payment System (EFTPS), by
electronic funds withdrawal or with a credit or debit card. There is no IRS fee for any
of these services, but for debit and credit card payments only, the
private-sector card processors do charge a convenience fee. For those who
itemize their deductions, these fees can be claimed on next year’s Schedule A Line 23. Those who choose to pay by
check or money order should make the payment out to the “United States
Treasury”.
Taxpayers with extensions should
file their returns by Oct. 15, even if they can’t pay the full amount due.
Doing so will avoid the late-filing penalty, normally five percent per month,
that would otherwise apply to any unpaid balance after Oct. 15. However,
interest, currently at the rate of 3 percent per year compounded daily, and
late-payment penalties, normally 0.5 percent per month, will continue to
accrue.
Fresh Start for Struggling Taxpayers
In many cases, those struggling to
pay taxes qualify for one of several relief programs. Most people can set up a
payment agreement with the IRS on line in a matter of minutes. Those who owe
$50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement to set up a monthly
payment agreement for up to 72 months or request a short-term extension to pay.
Taxpayers can choose this option even if they have not yet received a bill or
notice from the IRS.
Taxpayers can also request a payment
agreement by filing Form 9465. This form can be downloaded from
IRS.gov and mailed along with a tax return, bill or notice.
Alternatively, some struggling taxpayers
qualify for an offer-in-compromise. This is an agreement between
a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less
than the full amount owed. Generally, an offer will not be accepted if the IRS
believes the liability can be paid in full as a lump sum or through a payment
agreement. The IRS looks at the taxpayer’s income and assets to make a
determination regarding the taxpayer’s ability to pay. To help determine
eligibility, use the Offer in Compromise Pre-Qualifier, a free online
tool available on IRS.gov.
Details on all filing and payment
options are on IRS.gov.
Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
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