WASHINGTON -- Last-minute headaches, missed deductions, possible tax penalties - all are potential hazards at tax time. Here are some tips from the Internal Revenue Service on how to avoid those problems:
- Don't procrastinate. Don't put off doing your taxes until the last minute. If you're hurrying to meet the filing deadline, you may overlook potential sources of tax savings or make errors.
- Organize your tax records. Group your records and receipts into categories. Start with the income, deduction or tax credit items that were on last year's return.
- Visit the IRS online at http://www.irs.gov. Anyone with Internet access can download tax forms, instructions and publications as well as tax law information and answers to frequently asked tax questions.
Frequently used forms are also available at many libraries and post offices. Or order forms from IRS by calling 1 (800) 829-3676 (1-800-TAX-FORM).
- Get IRS Publication 17. This publication, entitled "Your Federal Income Tax," is the best single source of answers to common tax questions. Download it from the IRS Web site or order it by calling the number above. Specialized IRS publications on retirement benefits, mortgage interest and other topics can be ordered the same way.
- Take advantage of free assistance. Prerecorded messages on 150 tax topics are available through IRS' TeleTax service at 1 (800) 829-4477. The IRS staffs a tax help line at 1 (800) 829-1040, 7 a.m. to 10 p.m. on weekdays and 10 a.m. to 3 p.m. on Saturdays from Jan. 25 through April 15.
- Use IRS walk-in sites. Forms, publications and tax help are available at 400 IRS offices nationwide on a walk-in or appointment basis. For more information, call the IRS help line at 1 (800) 829-1040.
- Volunteer Programs. IRS-trained volunteers will provide free tax assistance at community locations through the Volunteer Income Tax Assistance Program for people who cannot afford to pay for professional assistance, don't speak English or are disabled or elderly.
IRS' Tax Counseling for the Elderly program offers help to people 60 or older, particularly those confined to their homes or living in retirement communities. Hundreds of organizations across the country receive funds from IRS to participate in this program; the largest participant is AARP. For more information, visit AARP's Web site at http://www.aarp.org/taxaide.
- Make a final error check. Before you file, recheck your math. Make sure that names and identification numbers for yourself, spouse and dependents are correct and legible.
- File electronically. This is the fastest and most accurate way to file a tax return. If you're due a refund, the wait time for e-filers is half that for paper filers.
- Direct deposit refunds. Having IRS deposit your refund directly into your bank account gets your money to you faster and reduces the chance of theft. You'll need to know your bank account number and the bank's routing number.
- Don't panic if you can't pay. You can apply for an IRS installment agreement, which sets a monthly payment amount and due date. You can also charge your payment on a credit card. Electronic filers with a balance due can file early and have the money taken directly from their bank account on the due date.
- Request an extension of time to file. You can get an automatic four-month filing extension to Aug. 15. Call 1 (888) 796-1074, e-file a form 4868 from your tax preparation software, or send a paper form 4868 to the IRS. To request an extension by computer or phone, you will need to know the adjusted gross income and total tax amounts from your 2001 return.
Important: Extending your filing deadline doesn't give you an extension of time to pay. You will owe interest on any tax not paid by the April 15 deadline, plus a late penalty if you have not paid at least 90 percent of your total tax by that date.
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