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William Van Arsdale, right, volunteers to help Central Arizona Shelter Services client prepare his taxes. (AP Photo/The Arizona Republic, Yoko Furukawa) |
Taxes Are Due On April 15 Are You Ready?
Mention the word taxes and many people start sweating . . . There are so many tax forms to read. Following the rules can seem impossible. Relax. The Internal Revenue Service (IRS) has worked hard to make the process easier for most taxpayers. There also are many organizations that offer free help.
Tax mistakes can cost you money, so it is important to use all the help you can get. You may want to hire a professional tax preparer, like H& R Block, if you can afford it. They can save you hundreds of dollars in taxes, and you can relax knowing they filed your tax return correctly.
The IRS requires that you file a tax return by April 15 of each year. You can request an extension. Even with an extension, you might have to pay what you think you might owe by April 15.
Here are some other tips to make your filing easier:
Do a Head Count
The IRS requires that you identify yourself in one of five ways:
Single - defined as unmarried, legally separated and (after a period of time) widowed.
Married Filing Jointly - means you and your spouse report your incomes on one tax return. You must both sign the return.
Married Filing Separately - you and your spouse file separate returns and each must pay his or her own taxes.
Head of Household - you must be single (although some married persons who live apart may qualify) and be responsible for more than half the upkeep of a home where a qualifying dependent resides.
Qualifying Widow or Widower with Dependent Child - if your spouse died during the previous two tax years (and not the tax year of the return), and you have a dependent child and meet certain other requirements, you may qualify.
Choose Your Forms
Everyone must file the basic tax form 1040 (or 1040EZ or 1040A). You must include other forms depending on the type and amount of income earned and deductions taken.
Gather Income Statements
W-2 forms are wage and tax statements you receive from your employer. You should receive a W-2 form from every employer at the beginning of each year for income earned the previous year. If you do not receive a W-2 form by February 1, contact your employer. It is your duty to report all your earnings.
Banks, credit unions, and other investment firms provide 1099 forms that show interest earned during the previous year. You might also get a 1099 if you worked as an independent contractor. Interest and other income must be added to your total earnings. Again, it is your duty to report the earnings listed on all 1099s. (Continued on Page 5)
Prepare Your Return
Use the following checklist as you gather information and prepare your taxes:
Collect all records, including W-2s, 1099s, receipts, etc.
Pick up your forms and schedules from the public library or IRS.
Fill in your tax return form using the directions in the correct booklet.
Check your return for accuracy.
Sign and date your return.
Attach all required forms.
Include the payment form (Form 1040-V) with any required payment.
Avoid Errors
People make mistakes, and the IRS understands this. However, if you are aware of the most common mistakes, you may be less likely to make them. Make sure
your Social Security number is correct
your math was done right
your forms are signed. If you are filing jointly, you and your spouse must both sign the form
you attached all of your W-2 forms
If you do make a mistake, you can correct your return by filing a 1040X.
Send Your Return
Your return should be sent to the correct IRS processing center. Use the envelope provided by the IRS in the instruction book or find the address in the instruction books for the 1040EZ, 1040A or 1040 forms. IRS centers are listed next to each state.
You can also send in your return by computer. According to the IRS, electronic filing is faster and more accurate. Anyone who usually submits a 1040, 1040A or 1040EZ form can file this way. Many companies that prepare taxes (like H&R Block) offer electronic filing. A fee may be charged for this service. Home computer users may file by computer using on-line services. Check the IRS web site for details at www.irs.gov.
Help is Available
The IRS is your best source of information. You can get a list of helpful publications from the IRS by calling 1-800-829-3676.
There are local programs, such as Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE), to help older, disabled, low-income or non-English speaking persons complete the basic forms. Your area technical college might also offer filing assistance.
Filing and paying taxes is part of life, but it does not have to be unpleasant. The more organized you are and the more you learn about how to file your taxes, the easier it will become. Many happy returns!
Source: www.pueblo.gsa.gov (January 1999, Revised October 2005)
Which Tax Form Do I Use?
1040EZ. You use this form if you are Single or Married Filing Jointly, you have no dependents, you and your spouse are under 65 and not blind, your taxable income (which can only be from certain sources) is less than $50,000, your earned interest is less than $400; and, you do not itemize deductions.
1040A. You may be able to use this form if your taxable income is less than $50,000 and you do not itemize deductions.
1040. Everyone can use this form to report all types of income. You must use this form if your taxable income is greater than $50,000. The 1040 is also the form used when you itemize your deductions instead of taking the standard deduction. (A standard deduction is the amount the government allows each person to claim instead of itemizing deductions. The amount of the standard deduction changes annually.)
The following is a list of the schedules (forms) used most often with the 1040:
Schedule A (itemizes deductions)
Schedule B (reports taxable interest or dividends in excess of $400)
Schedule C or C-EZ (reports profit or loss from a business)
Schedule E (reports other income and losses)
Schedule EIC (claims earned income tax credit)
Tax Return Tips
Following these suggestions should help your return receive prompt and accurate attention:
Your return should be neat.
Round money amounts to the nearest dollar.
Use last years forms as a guide so you do not forget sources of income or deductions.
Always file on time even if you do not have the money to pay.
Include a check if you owe money. Put your Social Security number on the check, and attach it to Form 1040-V.
Keep a copy of your tax return and other documents for your records.
Get help if you have questions.
Get organized for next year. Set up folders for your records and receipts.
Keep your records three years after the filing deadline.