Missed the Tax Deadline? Here's My Advice

Yesterday was the deadline to get your tax return filed. Hopefully you filed your taxes right on time and are currently relaxing in post tax season glow. If not, here is my advice on how to get your taxes taken care of without incurring excessive fees and penalties.

Don't Wait Any Longer

The best advice I can give you is not to wait any longer. Get your tax returns prepared and filed as soon as possible. If you get your return filed within the next couple of days, any penalties you’re assessed will be minor, and you may escape the penalties altogether. However, the longer you wait, the more you will end up owing Uncle Sam.

Too Late for an Extension

Unfortunately, if you did not request an automatic extension of time to file with the IRS before the deadline, you missed the opportunity to get an additional six months to file your return. Don’t even bother trying to file one now.

Be Fast, But Cautious

Although you should get your returns filed as quickly as you can, you still need to be accurate and meticulous. Mistakes on your taxes can cost you money through missed deductions, or improperly reported income, and can even invite an audit. Only claim deductions and credits that you are entitled to; make sure you include all sources of income on your return; and double check to make sure your Social Security number, address, and other personal information are all accurate. And for heaven’s sake, remember to sign your tax returns!

FTP and FTF Penalties

There are two types of penalties that the IRS can assess, Failure to File (FTF), and Failure to Pay (FTP). Therefore, even if you cannot afford to pay the taxes you owe, you should still file a return ASAP to prevent at least one type of penalties. If you don’t file or pay, the IRS will hit you with both.

Payment Options

If you do not have enough money in the bank to pay the taxes you owe, you might want to think about paying by credit card. The IRS does accept credit card payments, just be aware that you will have to pay an additional fee, as well as interest to your credit card company. Of course, that might be a small price to pay for avoiding the stress and hassle of IRS debts.

Payment Plan

Depending on how much you owe, you may be able to set up a payment plan with the IRS, also known as an installment agreement. If you owe less than $25,000, you can use the IRS' Online Payment Agreement program to submit your application. Alternatively, you should consider contacting a tax lawyer or enrolled agent to prepare the application on your behalf.

Substitute Return

If you do not file a return, then the IRS will file a substitute return on your behalf. This is not a good thing since the IRS will likely not include deductions, credits or exemptions for which you are eligible. As you can imagine, that can make your tax bill much larger than it should be. Avoid the entire mess, and file your returns, even if they are late.

State Tax Returns

Like I mentioned in last week's Questions for The Tax Lady entry, some states, including California, will automatically give you an extension if you do not file before the deadline. However, every state has different rules for late filing and payments, so be sure to contact your state’s tax agency to make sure that you are compliant.

Professional Help

Remember, you always have the option to hire a professional to help get your return filed, and setup a payment plan with the IRS. Just keep in mind that many tax preparation offices have seasonal hours, so remember to call and make an appointment as soon as possible.

Can’t File on Time? Get an Extension until Oct. 17

In their newest press release, the IRS is reminding people that you can always request an automatic extension of time to file your tax return. I've include text of their release below, or you can check out this article I posted a few weeks ago on why you might want to request an extension even if you intend to file your return in on time.

Are you unable to complete and file your federal individual tax return by the April 18 deadline? If so, you can request an extension of time to file, which will automatically give you until Oct. 17, 2011, to submit your tax return to the Internal Revenue Service.

An extension gives you an additional six months to file your tax return. But keep in mind that an extension of time to file is not an extension of time to pay. All outstanding balances are due on April 18, 2011.

The IRS expects to receive approximately 10 million extension requests in 2011, which is about the same as last year.

Numerous Ways to Get an Extension

In order to get an extension, you need to file Form 4868 with the IRS.

Taxpayers can electronically file Form 4868 through IRS Free File or Free File Fillable Forms. Using Free File to prepare and electronically submit Form 4868 is free to everyone, regardless of income.

More at IRS.gov...

Now Is The Time to Think About Filing a Tax Deadline Extension

The deadline to file your tax return is only three weeks away (April 18 for those who still don’t know). If you have not yet filed your federal return, I highly recommend taking a minute to request an automatic 6 month extension of time to file with the IRS. Why? There’s no penalty for filing early, but there sure is a penalty for filing late. The extension is a “better safe than sorry” move that can save you a lot of cash!

5% Per Month Penalty

If you do not request an extension, and miss the filing deadline, you could be subject to up to a 5% (4.5% for late filing, and 0.5% for late payment) per month penalty on any unpaid balances. Even if you only owe a small amount, an additional 5% per month can add up quickly.

IRS Form 4868

To request your extension, you will need to file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return with the IRS before the April 18th deadline. You can chose to either file a paper form, or e-file from your computer. It is your right as a taxpayer to request an extension, just remember that it MUST be mailed by April 18. If it’s late, the IRS will not accept it.

Not an Extension of Time to Pay

When you file IRS Form 4868 you will have an additional 6 months to file your federal tax return. However, keep in mind that this is not an extension of time to pay any taxes that are due. If you are likely to owe the IRS, you should consider making an estimated payment, or you will be looking at late penalty fees and interest accruing each month your payment is late.

Electronic Payments

If you e-file your automatic extension request, you will also have the option to make an estimated payment using a credit or debit card. You can pay by phone or over the Internet. If you think you’ll owe, make your best guess and pay up.

File ASAP

Once you request your extension, don't just forget about your taxes all together. As I mentioned, the extension is not an extension of time to pay. Therefore, if you aren't making an estimated payment, and you do end up owing the IRS, then you will want to get both your return and payment in as quickly as possible to avoid nasty fees.

Start Preparing for Next Tax Season Now

The best way to make sure you won’t need to file an extension next year is to stay on top of your taxes all year round. For more information, check out this article I posted a while ago on how to avoid needing an extension to file your return.

Questions for the Tax Lady: January 17th, 2011

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question: Did the IRS really extend the deadline to file this year? Does it apply to all taxpayers, or only in Washington D.C.?

Answer: Yes, the IRS did in fact extend the filing deadline until April 18, 2011. The reason for the extension is Washington DC observes Emancipation Day, which falls on April 15 this year. By law, all holidays Washington DC observes impact tax deadlines the same way federal holidays do: so all taxpayers have three extra days to file.

If you file for a 6 month extension, you will have until October 17, 2011 to file.

But remember, three extra days is no excuse to procrastinate! Get your taxes prepared and filed in a timely manner to avoid that last minute stress, and the possibility of missing the deadline!

Question: I found out I owe the IRS about $3,500 from last year. Do I have to pay it all at once or can I sign up for a payment plan?

Answer: Since your tax debt is relatively small – although it probably doesn’t feel very small to you! – you should be able to get a streamlined installment agreement. This allows you to repay your debt in monthly payments, instead of in a lump sum. You will still pay interest and penalties, so the sooner you pay it off, the smaller the financial impact will be for you.

To request an installment agreement, you can use the IRS’s online application here.

Important Tax Deadline Approaching

The deadline for taxpayers who filed a request for an automatic extension is only a few days away (October 15th), and if you have not yet net filed your return then you should do so as soon as possible. However, Friday is also a deadline for thousands of nonprofit organizations at risk of losing their tax-exempt status.

SV Herald.com:

“The Oct. 15 deadline is particularly important this year because it’s the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July,” said IRS commissioner Doug Shulman. “And as always, it’s an important deadline for taxpayers who took an extension to file their returns.”

Don’t miss your 1040 deadline

The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers can wait until after Oct. 15 to file, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.

The IRS encourages taxpayers to e-file. E-file with direct deposit results in a faster refund than by using a paper return. Electronic returns also have fewer errors than paper returns. Oct. 15 is the last day to take advantage of e-file and the Free File program.

Read more here

Extending the Homebuyer’s Credit… Again?

The Homebuyer’s Credit expired on April 30, 2010, but a handful of politicians are working to reinstate it, fearing an extended real estate slump. While Harry Reid proposes extending the closing deadline on the most expired credit (all pending deals must close before June 30 to be eligible for the credit) to September 30, Ron Paul is proposing we make the credit permanent.

Critics argue that the credit was wildly expensive for taxpayers as a whole, and does little to stimulate real estate sales. Many say that those who took advantage of the credit would have purchased a home anyway, and the credit simply made them accelerate their purchase.

On the other hand, following the expiration of the credit, many real estate experts fear that the housing market will slump, causing a “recession double dip.” Of course, homeowners who claimed the credit were thrilled to receive up to $8,000 in free money from Uncle Sam. Add in that this in an election year; every politician is looking for ways to curry favor with voters, and this tax credit was very popular with taxpayers.

Read more about Reid’s proposal here, and see more about Paul’s proposal here.

Preserve Your Organization's Tax-Exempt Status with IRS

Does the IRS recognize your organization to be a non-profit or have tax-exempt status? The IRS has announced a critical deadline for many tax-exempt organizations. If you want to preserve your organization’s tax-exempt status, you will need to file Form 990 by May 17th or risk the revocation of your federal tax-exempt status. Usually the deadline for filing this form is May 15th, if using the calendar year or the 15th day of the fifth month after an organization’s fiscal year ends. Since May 15th falls on a Saturday this year, Monday, May 17th is this year’s deadline.

Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N (e-Postcard). Tax-exempt organizations with annual receipts above $25,000 must file a Form 990 or 990-EZ, depending on annual receipts. Any private foundations file form 990-PF.

Since 2007, The Pension Protection Act of 2006 mandates that all non-profit organizations (other than churches and other church related organizations) must file this form with the IRS. If your organization does not file for three consecutive years it will automatically lose its federal tax-exempt status. Don’t let that happen, because otherwise, you may be taxed on any income received between the revocation date and your renewed exemption. You will have to reapply with the IRS to regain tax-exempt status.

What to do if you Missed the Tax Deadline

The deadline for filing your 2009 taxes was last week. If you are one of the millions of Americans who missed the deadline, then you may find comfort in knowing that you are not alone. In 2008, the IRS received over 9.5 million extension requests from taxpayers who were unable to get their returns filed before the deadline. Although you may face a penalty for filing your return late, it is important that you try to get your returns completed as soon as possible.

Can I Still Request an Extension?

The IRS will deny a request for an extension that is filed after midnight on April 15. Therefore, if you have missed the deadline, you need to file your tax return as soon as possible. Keep this in mind for next year; if you know you will not be able to finish your taxes before the deadline, you should always request an extension before the April 15 deadline.

Missing the Deadline

If you completely missed the deadline and did not file a request for an extension with the IRS, you need to act quickly and get your returns filed and pay any taxes you might owe. The longer you wait, the higher the late penalties will be. The failure-to-file penalty is 5 percent of the balance due per month. If your return is more than 60 days late, the minimum penalty is the smaller of $135 or 100 percent of the tax due.

The Danger of Rushing

Although, I advise you get your return filed as quickly as possible, it is important that you do not rush through the process of preparing your return. When you rush, you are more likely to make mistakes that could result in additional penalties. Always review your math carefully before sending in your return, and make sure to include your Social Security Number on any checks you write to the IRS. You definitely do not want your payment going to pay someone else’s tax liability!

Get Professional Help

If the thought of getting your returns filed causes you anxiety, then you may want to consider having a professional prepare your return on your behalf. This can help reduce the likelihood of a mistake and a tax professional can also get your return prepared and filed quickly. However, keep in mind that many tax preparation offices have seasonal hours so you should call and make an appointment as soon as possible.

Types of Penalties

There are two main types of penalties the IRS may assess on a taxpayer who files or pays late. They are failure to pay (FTP) penalties and failure to file (FTF) penalties. Oddly enough, the taxes for failing to file on time are often higher than those for failing to pay on time, so even if you cannot afford to pay the taxes owed, you should still file your return.

The Cost of Being Late

Late penalties for filing are normally 5% of the unpaid taxes for each month they are late. If you fail to file and fail to pay, the failure to file penalty will be reduced to the failure to pay penalty, which is 0.5% of your unpaid taxes per month.

Questions for the Tax Lady: April 12th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: I still have not prepared my tax return. Is it possible to get professional help this close to the tax deadline?

Yes! Go to RDTC.com/Locations to find the closest Roni Deutch Tax Center. All of my tax centers are open late through tax season, so you should have no trouble making an appointment.

Question #2: How do I request an automatic extension from the IRS?

To get an automatic six month extension of the deadline to file your return with the IRS you will need to complete and file IRS Form 4868, Application for Automatic Extension of Time To File U.S. Income Tax Return. However, this will not extend the deadline to pay the IRS any taxes you might owe.

Avoid Common Mistakes When Filing Your Tax Return

The tax deadline is just a week away, and for those of you who still have not filed your return the IRS has put together a new press release sharing common tax filing mistakes Americans should avoid. You can find a snippet of the release below.

File electronically. If you e-file or Free File, tax software will do the calculations, flag common errors and prompt you for missing information.

Remember Making Work Pay. The Making Work Pay tax credit –– available in 2009 and 2010 –– is worth up to $400 for individuals and $800 for married couples. Most people got it as a reduction to their paycheck withholding. Form 1040 filers must complete Schedule M, attach it to their returns, and claim the credit to benefit from it. (Tax software handles these calculations automatically for e-filers.) Also, if you received the one-time Economic Recovery Payment, you need to reduce your Making Work Pay credit by that amount. Taxpayers who are not certain whether they received the economic recovery payment can find out with the help of an online tool, Did I Receive a 2009 Economic Recovery Payment? If you don’t have access to the IRS Web site, call 866-234-2942.

Claiming the Homebuyer Credit? If you claim the first-time homebuyer credit, complete Form 5405, and include it along with the settlement document, such as a HUD-1. More information is available on the homebuyer page.

Use the peel-off label if you mail a paper return. Paper filers may line through and make corrections right on the label. Be sure to fill in your Social Security number in the box provided on the return. If you do not have a peel-off label, fill in all requested information clearly, including Social Security numbers.

Check only one filing status. Also, check the appropriate exemption boxes. When you enter Social Security numbers, make sure they are correct.

Deadline Looms for Americans to Disclose Accounts in Foreign Tax Havens

From LATimes.com:

Wealthy U.S. taxpayers, concerned about an Internal Revenue Service crackdown on the use of secret overseas bank accounts as tax havens, are rushing to meet a Thursday deadline to disclose those accounts or face possible criminal prosecution.

The concern was triggered this summer when Switzerland's largest bank, caught up in an international tax evasion dispute, said it would disclose the names of more than 4,000 of its U.S. account holders.

The decision shattered a long-held belief that Swiss banks would guard the identities of its American customers as carefully as they did their money, and it raised concern that other international tax havens might be next.

Under an amnesty program, the IRS is allowing taxpayers to avoid prosecution for having failed to report their overseas accounts. As a result, tax attorneys across the nation have been besieged by wealthy clients who are lining up to apply even though they will still face big financial penalties.

Tax lawyers in Southern California say they've encountered an array of clients concerned about international bank accounts: Hollywood producers, immigrants who left behind foreign accounts and business owners who have stashed money overseas to avoid taxation.

"It's crazy busy," said Pasadena tax attorney Phil Hodgen, who for a brief period in September stopped accepting new clients because he was overwhelmed with amnesty requests. "These people are calling, saying, 'I can't sleep at night.' "

Some 3,000 U.S. residents have voluntarily disclosed their foreign bank accounts to the IRS this year, compared to fewer than 100 in 2008, said one U.S. government official who asked not to be identified.

Applications For Home-Buying Tax Credit To Be Cut Off Today

The application deadline for the popular $10,000 California homebuyers tax credit is today. The California Franchise Tax Board had extended the number of applications they would accept, and there are now 75 spots left for California taxpayers who are eligible for the credit. However, according to the Sacramento Bee the California Franchise Tax Board announced this morning that they would no long accept applications past midnight tonight. Check out a clip of Sac Bee’s coverage of the last minute change below.

Early Wednesday, the FTB said it has received 11,925 applications for the popular tax credit - 75 short of its 12,000-application limit.

The state tax agency said last month it would take 2,000 extra applications for the credit because many received are duplicates, invalid or incomplete.

The tax credit program launched March 1 to move statewide home builders' excess, unsold inventory, proved more popular than expected. The FTB said it has already issued 4,808 certificates for nearly $45 million worth of credits. Officials expect to process and award all the credits by the end of August.

Home builders have shifted their focus to efforts to add $200 million more to the original $100 million allocation. But that's proved more difficult than expected in a rancorous budget climate. Some economists have criticized further allocations as a stimulus for home building when the state's larger problem, they argue, is an excess of unsold existing homes.

The California Building Industry Association, a trade group for residential builders and suppliers, maintains that each $10,000 tax credit adds $16,000 to state government revenues and $3,000 to a local government because of the economic activity generated.

Missed the Tax Deadline? File Anyway

So, April 15 came and went and you didn’t file your taxes? Didn’t even get your extension filed in time? Well, I hate to be the bearer of bad news, but odds are you will be penalized when you finally do file.

If you didn’t file your taxes, it’s probably because you owe and can’t afford to pay, yet. If you were expecting a refund, you probably got your taxes filed on time, right? But I would caution you to file now, even if you can’t fully pay. Why?

Because you are shooting yourself in the foot! The IRS assesses interest on any unpaid taxes, and when you don’t file, they add on a failure-to-file penalty. The failure-to-file penalty adds 5% of your total tax bill per month! Every month you put off filing means more money you’ll end up owing. Even if you don’t have the money to fully pay your taxes, by filing now you can avoid any further failure to-file-penalties.

Thinking you’ll just file an extension? Think again. The IRS automatically denies any extension requests filed after midnight on April 15. Don’t even waste your time and postage.

So, file your taxes and pay the bill. Need help preparing your taxes—look up a Roni Deutch Tax Center. If you cannot pay the bill, you might want to look into establishing an Installment Agreement or Currently Not Collectible status. If you need help, give my firm a call.

Next year, make getting your taxes filed on time a priority.

Happy Tax Day!

via fishbowl LA.

Obama Highlights Tax Breaks

From The WashingtonPost.com:

President Obama marked Tax Day 2009 with a White House event aimed at highlighting the tax breaks included in the stimulus bill and countering conservatives who launched nationwide tea parties to complain about taxes and rising government spending.

While a few hundred protestors dumped tea bags in Lafayette Square outside the White House, Obama presented nine taxpayers he said were better off financially because of his efforts.

"We have passed a broad and sweeping tax cut for 95 percent of American workers," Obama told reporters in the Old Executive Office building. "This tax cut was a core focus of my campaign, it was a core component of the American Recovery and Reinvestment Act, and it is the most progressive tax cut in American history. And starting April 1st,
Americans saw this tax cut in the extra money that they took home with each paycheck."

In documents released to reporters, Obama touted 10 tax cuts that Americans are receiving as part of the government's overall effort to spur growth and consumer spending. Chief among those, he said, is a tax credit appearing now in people's pay checks and a first-time homebuyers tax credit.

He called the pay check tax cut "the most progressive tax cut in American history" and said it would help create a half-million jobs.

"For too long, we've seen taxes used as a wedge to scare people into supporting policies that increased the burden on working people instead of helping them live their dreams," he said. "That has to change."

The message from conservatives was very different, attacking Obama and Democrats in Congress for spending too much and failing to cut the tax burdens enough for most people.

The Income Tax System is Broken

From CBSNews.com:

On April 15, don't be surprised if the line at your local post office is a bit shorter than usual. That's because your neighbors may not be paying any income taxes this year.

An astonishing 43.4 percent of Americans now pay zero or negative federal income taxes. The number of single or jointly filing "taxpayers" - the word must be applied sparingly - who pay no taxes or receive government handouts has reached 65.6 million, out of a total of 151 million.

Those numbers come from an analysis published yesterday by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution. Neither is a low-tax or conservative advocacy group; the Urban Institute was created under the Johnson administration during the Great Society era, and it receives most of its funding from the federal government.

"You've got a larger and larger share of people paying less and less for the services provided by the federal government," says Roberton Williams, a senior fellow at the Tax Policy Center. "The concern is that the majority can say, 'Let's have more benefits, spend more,' if they're not paying for it. It's 'free.' That's not a good thing to have."

By historic standards, today's situation is an aberration. Between 1950 and 1990, the number of owe-no-money federal tax returns averaged 21 percent, dipping to 18 percent in 1986, according to Tax Foundation data. In the 1990s, the owe-no-money percentage hovered around 25 percent of taxpayers.

But then politicians began another round of tinkering with the tax code, adding reams of new pages to an already incomprehensible set of rules that even the guy overseeing the IRS can't seem to figure out.

Democrats wanted to lower taxes on the least affluent, while Republicans wanted to lower taxes on everyone. The result was bipartisan enthusiasm for tax credits aimed at everything from children (1997) and college students (1997) to hybrid cars (2005) and homebuyers (2009). Many of these credits dole out cash to people even if they report no income, making them mere government handouts.

Navigating a Tax Return Minefield

Earlier today NYTimes.com posted a helpful article for anyone trying to beat the tax deadline and get his or her returns in on time. The reporter spoke with Taxpayer Advocate Nina E. Olson on how to avoid making a costly mistake in the mad rush. I’ve included a portion of the article below but you can read the full text at The Urge to Fudge on Form 1040.

With just a few more days to file your tax returns, you may be tempted — especially in this down economy — to shave a little income, maybe, or add a little more to your deductions.

After all, what are the odds of being audited? (For the record: Only about 1.4 million of the 135 million returns filed each year are audited and of those, only about 310,000 taxpayers are forced to look an I.R.S. agent in the eye and explain their numbers.)

You couldn’t help thinking of this when one after another of President Obama’s nominees was caught underpaying taxes after the nominee’s returns underwent a heavy-duty scrubbing. Most people don’t have to worry about paying taxes on free limousines and chauffeurs — as in the case of Tom Daschle, the former South Dakota senator who was Mr. Obama’s first choice as health and human services secretary. But many of us could easily be unable to come up with a receipt for a charitable donation, which is what tripped up Mr. Daschle’s replacement, Kathleen Sebelius. And how many people think it’s easier to simply pay the baby sitter in cash and, by coincidence, avoid the nanny tax?

All this raises the question: If most Americans’ tax returns were subject to the same scrutiny as those inside the Beltway, would we find that many of us pay less than we really owe? Or would we find that a lot of returns are, at the very least, riddled with errors?

As it turns out, the most recent Internal Revenue Service statistics estimate that about 86 percent of taxes owed are collected. And of the approximately $290 billion that goes uncollected by the I.R.S., a big piece can be attributed to inadvertent mistakes, given the complexity of the tax code. But when presented with the opportunity, a large swath of people still seem to forget to report a chunk of their undocumented income.

Not surprisingly, the I.R.S. has studied the issue. And what it found was that the biggest portion of uncollected tax revenue was from people who run cash-intensive businesses and don’t have receipts for all their earnings. Wage earners, whose employers report every last penny, don’t have much wiggle room. As a result, only 1 percent of income from wages, salaries and tips is estimated to be underreported, compared with 57 percent of income from businesses like plumbers or other sole proprietors, according to a 2006 report conducted by the IRS’s National Research Program.

Another report on the subject found that those who earn $500,000 to $1 million have the highest rate of misreported income. These people often have income from investments and other sources that are hard to track.

“They make a risk calculation,” said Nina E. Olson, the national taxpayer advocate, whose office helps taxpayers resolve their problems with the I.R.S. “If the risk of me being discovered is low, the penalty is modest and the benefit is great, then I am willing to accept that risk.”

But, she added, that logic cannot alone explain the fact that an overwhelming majority pay their fair share given the IRS’s limited resources. When asked, of course, the vast majority of Americans claim to be a righteous bunch: 89 percent said it was unacceptable to cheat on their income taxes, according to the I.R.S. Oversight Board’s 2008 Taxpayer Attitude Survey. And 81 percent of those polled said their personal integrity had a “great deal of influence” on whether they’re truthful about their taxes.

But, as Ms. Olson explained, there’s only so much more reporting that can be reasonably done. Busy families can’t be expected to file a 1099 every time they pay the landscaper, for instance, or the party caterer.

What might work, Ms. Olson said, is appealing to people’s consciences, or really examining why we pay taxes and what society receives in return.

The government tried this tack during World War II, when it co-opted Donald Duck for the job. In an animated short produced by Walt Disney, a radio announcer reminds a tax-averse Donald that it’s his patriotic duty to pay taxes. Donald, who in 1941 earned $2,501 (the equivalent of $36,101 in today’s dollars), is persuaded after being told he needs to pay “taxes to beat the Axis!”

But civic duty may be a harder sell today, especially when average taxpayers are constantly bombarded with news of new bailouts, corporate tax breaks, loopholes and offshore hiding spots exploited by wealthier Americans.

IRS Urges Taxpayers To e-file Extension Requests by April 15 Filing Deadline

The IRS recently posted a new press release, urging taxpayers to file extensions before the filing deadline.

Taxpayers who need more time to complete their returns should submit their requests for an automatic extension electronically by April 15, the Internal Revenue Service urged today.

This year, anyone, regardless of income, can e-file their extensions at no cost from a home computer using IRS traditional FreeFile or FreeFile Fillable Forms. E-filing a request for an extension using either form of FreeFile is convenient, safe and secure, and taxpayers receive confirmation to keep with their records.

The IRS expects to receive 1.9 million extension requests electronically this year. A total of almost 10 million extension requests are expected during 2009 compared with 9.5 million extensions received during 2008.

The extension gives taxpayers until Oct. 15 to file the tax return. An extension does not give the taxpayer an extension of time to pay. Those who owe taxes can make a payment when they file the extension either by mailing a check or by several electronic payment methods, such as electronic funds withdrawals from bank accounts and credit card payments.

Taxpayers can get an automatic six-month extension of time to file their tax returns by filing Form 4868, Automatic Extension of Time to File.

Taxpayers can e-file the extension from a home computer or through a tax professional who uses e-file.

Top 10 Last Minute Tax Tips

The April 15^th tax deadline is just around the corner, and with everything else going on in the country right now there are millions of taxpayers that still need to prepare and file their income tax returns. To help those of you who are rushing around to finish before the tax deadline, I have compiled the following list of the top 10 last minute tax tips.

1. Make sure it is all there

Be sure you have attached all W-2’s and all necessary documents to your return, and have completed them correctly. Your social security is the most important identifying number, so check and double check that it is correct on all documents. It is also a good idea to put your social security number on the top of every form.

2. Check the IRS’ website

New deductions and credits are created every year, for your benefit. While we all like to think our tax preparers know everything, it never hurts to double check their work. The IRS updates their website frequently with all new tax laws, credits, and deductions.

3. E-File

If you are running short on time and cash, you can e-file (electronically file) your taxes on your own online. All the information you need is on the IRS website, and there are multiple help lines you can call for assistance. However, the sooner the better, as the IRS gets very busy this close to the tax deadline.

4. Be honest

The most important rule of filing your taxes is to always be honest. The repercussions you may receive for lying to get a deduction you do not qualify for could be a lot more than you would have saved. Check over your return one last time before sending it off to make sure you only claimed deductions and credits you qualify for.

5. Joint or separate

If you are married, take the time to see if filing joint will benefit you or not. Changing tax laws and situations may change which works best for you, so do not just assume you should choose the same thing you did last year. Also be sure to keep your spouse informed about potential changes. If you choose joint and they choose separate, or your info does not match, you may have an audit coming your way.

6. Make copies of everything

Before you mail in that return, be sure you have a copy of every single document and page you are sending. If you want to be extra safe then you might even ask the post office to give or send you a receipt so you have proof of post-mark. This will be your proof of filing if the IRS sends you an audit, or missing document letter, in the mail.

7. Use IRS mailing materials

The IRS sends you your own mailing materials for a reason – it makes the process easier for them. If you fail to use their documents to mail your return, you could be running the risk of receiving a later return. If details on the mailing materials are inaccurate, the IRS prefers you make changes right on the labels, in pen.

8. Not ready? File an extension.

If you are not quite ready to file, for any reason, definitely file for an automatic extension. There are numerous reasons you may feel the need to file an extension, but any reason is better than not filing your return at all. However, if you are going to owe the IRS money then you still need to have your payment to them by the 15^th.

9. Seek professional help

If you are new to filing your own taxes, or have recently changed filing status (i.e. newlywed, new business owner, new parent, etc.), then you may want to enlist some professional help. However, if you are going to get help from a tax preparer then you will want to make an appointment as soon as possible. The closer to tax day it gets, the busier the tax preparer’s office is going to be.

10. Check your math

Last but not least, always double check your math. It is much easier to make numerical errors than grammatical ones, so go over each and every number before you seal the envelope. It may seem like a hassle, but trust me it is much better to notice your own errors then to have an IRS auditor point them out.

40 Hours to Freedom

To help all those “last minute filers” out there, the Roni Deutch Tax Center™ will all stay open for extended hours today and tomorrow. Some participating locations will even stay open all night as part of our “40 Hours to Freedom” program. Check out the locations page on our website to find a location near you. If you do still need to file it is probably a good idea to call and make an appointment so that you are guaranteed a spot.

I cannot stress the point enough. Do not let tax day go by without either filing your return or filing an extension. If you ignore the tax deadline then you will be hit with interest and penalties that can very quickly add up to a decent amount of money. Additionally, this year it is especially important to file so that you can get your economic stimulus check this summer. Now, if you know you cannot file on time or you are not confident that you have all of the information to accurately prepare and file your return, then make sure you file for an extension. Check out IRS.gov for more information on extensions.