Here are some last minute tax tips
NEW YORK — Every year about a quarter of Americans wait until the bitter end to do their taxes. If you`re getting a late start, clear your weekend schedule, because the IRS estimates that it takes 16 hours to complete Form 1040, only 4 hours for EZ filers.
There are some overlooked resources that can help you out.
Taxpayers who make $64,000 or less can use the IRS ‘Free File’ software to prepare and file their federal taxes. Additionally, the Volunteer Income Tax Assistance or ‘VITA’ program offers free tax help to people who generally make $54,000 or less; those with disabilities; the elderly and limited English-speaking taxpayers who need assistance in preparing their tax returns.
In addition to VITA, the Tax Counseling for the Elderly program offers free tax help for all taxpayers, particularly those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors.
If you can`t meet the tax deadline, don`t fret. You can file for a 6-month extension with Form 4868 by April 18th. But extensions have a major caveat: The IRS gives you extra time to file, but not to pay. You must estimate your tax liability and send Uncle Sam at least 90 percent of it to avoid a penalty, which can add a total almost 50 percent of what you owe, to your tax bill.
If you don`t have the money on hand to pay the taxes owed, don`t hide. You can apply for a free 120-day extension to pay the bill; use an IRS installment plan; make an offer in compromise, or use a credit card. But, credit cards can be an expensive way to go because you`ll pay fees, which can run over 2 percent.