That’s why with about two weeks remaining until the April 18 filing deadline, taxpayers are rushing out to local tax preparation businesses to beat the clock.
“I do a lot of side work so I normally end up paying, so I wait,” said Carrollton’s Daniel Gaston, who had his taxes done Tuesday. “I was off today, so I figured I better see what the damage will be. I could probably do it myself, but tax laws change so much that I want to make sure I do it right. I’d rather pay someone and be sure than be in trouble later.”
Gaston is not alone, and local professionals say they have seen it all.
Even with the deadline approaching, there is still time for taxpayers to get the maximum out of their return, according to Cliff Waller, manager of Liberty Tax in Carrollton.
“There’s always time because you can always file an extension,” Waller said. “An extension will give you until Oct. 15 to get your taxes done.”
Taxpayers must request an extension before the filing deadline. The six-month extension is to file a return only and not an extension to pay taxes due. Those who are unable to pay their taxes are urged to file a tax return anyway to lessen the penalties and pay all that they can.
The taxpayer can then work with the IRS to set up a payment plan or go to IRS.gov and use the Online Payment Agreement Application. Even without requesting an extension, consumers have a couple of extra days because the IRS extended the deadline this year. Taxpayers have an extra weekend to file this year because of a District of Columbia holiday.
The deadline is usually April 15. Liberty Tax will be open until midnight on April 17 and 18. Liberty is offering 50 percent off tax preparation fees for first-year clients provided that they file their taxes by April 10. According to the IRS, 20 to 25 percent of taxpayers file in the final two weeks of the tax season.
About 7 percent of taxpayers seek a six-month extension to file. The Internal Revenue Service urges taxpayers to start now in gathering information and preparing their return to avoid hasty and possibly costly errors.
Numerous economic recovery tax credits are still available. One of those credits is the Making Work Pay Credit.
“If you’re working and make at least $2,000, you get up to $400 refunded back,” Waller said.
Individuals must claim the $400 ($800 for married couples) to receive the credit.
The American Opportunity Credit gives students more of a credit than they were able to get before. It offers a tax credit of up to $2,500 of the cost of qualified tuition and related expenses paid during the taxable year.
The term “qualified tuition and related expenses” has been expanded to include expenditures for course materials like books, supplies and equipment needed for a course of study, according to the IRS.
“Twenty-five percent of what you pay for tuition is now refundable,” Waller said. “That’s huge because that’s cash back in your pocket.”
Other credits which have expanded this year include the Child and Dependent Care Credit, which now covers a third qualifying child. The credit only covered up to two kids in the past, according to Waller. It is for expenses paid for the care of children age 12 and under so the primary caregiver can work or look for job.
The credit can be up to 35 percent of qualifying expenses, depending on adjusted gross income. The Child Tax Credit is another important tax credit that may be worth as much as $1,000 per qualifying child depending upon income. The Residential Energy Property Credit is also available for homeowners who made qualified energy efficient improvements to their existing homes.
The credit is 30 percent of the cost of all qualifying improvements with a maximum of $1,500 for improvements placed in service in 2009 and 2010. It applies to improvements such as adding insulation and energy efficient exterior windows. It also applies to adding energy-efficient heating and air conditioning systems.
The Earned Income Tax Credit is a tax credit for working individuals and families who had a 2010 adjusted gross income of less than $48,362. The EITC reduces the amount of tax owed and may also provide a refund of up to $5,666 for larger families. The $8,000 first-time home buyer credit is still available for people who entered into a binding contract by April 30, 2010, and went to settlement by Sept. 30, 2010.
Taxpayers can also file their taxes through IRS Free File, a brand-name software or online fillable forms, to prepare and e-file returns at no charge. Software is available to the 70 percent of taxpayers – those who earn $58,000 or less. Fillable forms have no income limitations. In addition to Free File, the IRS offers other free tax help services through volunteers at 12,000 sites nationwide.
The Volunteer Income Tax Assistance (VITA) sites serve taxpayers whose 2010 incomes were $49,000 or less. Tax Counseling for the Elderly sites serve taxpayers who are 60 and older.
But the IRS says that some people haven’t waited at all.
The IRS had issued more than $200 billion in tax refunds as of March 25. The average refund is $2,952. The IRS received more than 82 million individual income tax returns, which is 58 percent of the 141 million returns expected this year.
The agency has received about the same number of returns as it did at this time last year. But the processing of returns is up 3 percent from the same time last year, according to the IRS, which expects to issue up to $300 billion in refunds this year.