1. Prepare now: Make sure you have all the documents you need to file your tax return. Gather together your Forms W-2 (earnings statements) and 1099 (interest/dividend statements). If you own a home, you will need Form 1098 to get the amount of mortgage interest and real estate taxes you paid. If you itemize, make sure you have the receipts for all your deductions such as charitable donations and medical expenses. You will also need a Social Security number (SSN) for yourself, spouse and any dependents listed on the return. If you don’t e-file, check all math and data entries — including SSNs — to ensure they are correct and legible. Inaccurate or missing information could delay your refund.
2. File electronically: Many Georgia residents will have the opportunity to electronically prepare and file their federal tax returns for free this year using Free File — those with an adjusted gross income of $57,000 or less. In fact, approximately 70 percent of Georgia tax filers are eligible to use Free File. Just go to the IRS website at www.irs.gov, click on the Free File link and check out the eligibility requirements for each participating software company.
Free File Fillable Tax Forms is a free “no income limits” online tool enabling you to prepare and electronically file your federal income tax return. If you know what forms you need to file, (without the assistance of a tax return preparer or tax preparation software) you may select the federal income tax forms and schedules you plan to submit from the irs.gov website. Just fill in the data, sign electronically, print a copy for record keeping, and e-file your return. The Free File Fillable Tax Forms will perform basic mathematical calculations for you
3. What if I can’t file my return by April 17?
People who haven’t finished filling out their return can get an automatic six-month extension (Oct. 15) to file by mailing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The fastest and easiest way to get the extra time is through the Free File link on irs.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an automatic tax-filing extension on Form 4868. Reminder: An extension does not extend the time to pay income tax. You need to estimate your tax liability and pay any balance due when you request the extension. Several payment options are available, including electronic funds withdrawal, credit card and check. If you are unable to pay the total balance due, you should pay as much as possible and then contact the IRS about an installment plan (submit Form 9465, Installment Agreement Request). Even if you cannot pay the balance due, it is important to either file a return or request an extension to avoid the failure-to-file penalty. By properly filing this form, a taxpayer will avoid the late-filing penalty, normally 5 percent per month based on the unpaid balance that applies to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 17. The current interest rate is 3 percent per year, compounded daily, and the late payment penalty is normally 0.5 percent per month.
4. Don’t miss out on unclaimed refunds: Nearly 36,000 Georgians who haven’t filed a tax return for 2008 are missing out on more than $30 million in unclaimed refunds. However, to collect the money, a return for 2008 must be filed with the IRS no later than Tuesday, April 17, 2012. The average unclaimed refund is $581.
Also, if you wish to amend your 2008 return, it must be mailed by Tuesday, April 17.
5. Educator expense deduction (expired tax break for 2011) for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250, claim on Form 1040, Line 23 or Form 1040A, Line 16. If you are an eligible educator, you can deduct up to $250 ($500 if married filing joint and both spouses are educators, but not more than $250 each) of any unreimbursed expenses (otherwise deductible as a trade or business expense) you paid or incurred for books, supplies, computer equipment (including related software and services), other equipment and supplementary materials that you use in the classroom. For courses in health and physical education, expenses for supplies are qualified expenses only if they are related to athletics. This deduction is for expenses paid or incurred during the tax year. The deduction is claimed on either line 23 of Form 1040 or line 16 of Form 1040A.
6. Where to get tax help or forms: The IRS has several options available for tax help and forms. Go to the IRS website at www.irs.gov to get tax forms and publications as well as tax information. Some local libraries and post offices have forms and are open evenings and weekends. Recorded tax information on a variety of tax topics is available by calling 1-800-829-4477. Toll-free telephone assistance is available by calling the IRS at 1-800-829-1040. Free tax help is as near as a community center, school, local library or senior center for thousands of Georgians this year. Volunteers are on-site at more than 400 locations statewide and are ready to offer free tax return preparation and, at many sites, free electronic filing. Call 1-800-906-9887 for volunteer tax site locations. Help is also available at some IRS offices. Check out the IRS website at www.irs.gov for IRS office locations and hours.
7. What are some of the most common errors people make when filing a paper return?
• Social Security number (missing, illegible or SSN and name do not match).
• Failure to sign and date the return. For a joint return, both spouses must sign.
• Earned Income Credit figured or entered incorrectly.
• Incorrect tax amount entered from the tables.
• Math errors.
When filing a paper return, carefully check the identification numbers — usually Social Security numbers — for each person listed. This includes you, your spouse, dependents and persons listed in relation to claims for the Child and Dependent Care Credit or Earned Income Tax Credit. Missing, incorrect or illegible Social Security numbers can delay or reduce a tax refund.
8. Mailing Your Return: Use the coded envelope included with your tax package to mail your return. If you did not receive an envelope, check the section called “Where Do You File?” in the tax instruction booklet. Make sure all W-2s and necessary schedules are attached to your return.
9. Taxpayers with a balance due IRS now have several quick and easy ways to electronically pay what they owe. They include:
• Electronic Federal Tax Payment System (EFTPS). This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll or for more information, call 1-800-316-6541 or visit www.eftps.gov.
• Electronic funds withdrawal. E-file and e-pay in a single step.
• Credit or debit card. Both paper and electronic filers can pay their taxes by phone or online through any of several authorized credit and debit card processors. Though the IRS does not charge a fee for this service, the card processors do. For taxpayers who itemize their deductions, these convenience fees can be claimed on Schedule A, Line 23.
Taxpayers who choose to pay by check or money order should make the payment out to the “United States Treasury.” Write “2011 Form 1040,” name, address, daytime phone number and Social Security number on the front of the check or money order. To help ensure that the payment is credited promptly, also enclose a Form 1040-V payment voucher.