Three Tips for Filing Taxes

No one likes to file their taxes and April 15, 2010 seems far away, but the deadline will be here before you know it.  Here are three tips to make it somewhat less onerous:

  1. File your taxes electronically – You can (1) e-file through the IRS website (this is the only option without any tax preparation help) , (2)  free file, which provides free income tax preparation and electronic filing for eligible taxpayers, or (3) pay for a tax preparation software or company if you do not meet the income requirements for free file.  Either way, filing electronically ensures faster refunds, greater accuracy, and less paperwork.
  2. Request a direct deposit for your refund – Direct deposit will also ensure that you receive your refund quickly.  Last year, over 100,000 refund checks were returned due to mailing address errors.  The number is low, but you don’t want to be counted amongst them if you are due a refund.
  3. File even if you can’t pay your taxes in full – First, you may be eligible for a short-term extension of up to 120 days.  Second, if you cannot pay in full in 120 days, you may also be eligible to apply for a monthly payment plan, but there is a $105 user fee and $52 for payments deducted directly from your bank account (or a reduced $43 user fee if you meet the income requirements).  With either of the two options, you will also have to pay interest on the amount due.  Under no circumstances, however, should you not file or file late, because you will only incur more penalties, including felony charges.

Good luck!

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