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What Tax Filers Should Know Right Now!

You've got less than a week to file your tax return. The IRS has some advice on how to meet that challenge.

About one of every four taxpayers, including nearly 4 million Californians, wait until the last week to do their taxes. If you’re one of those taxpayers, here are 12 questions and answers to help you meet the April 15 deadline Tuesday:

1. Where Can I Get Internal Revenue Service Help?

Click here for IRS tax information as well as for forms and publications that can be downloaded 24 hours a day, seven days a week.

• IRS Taxpayer Assistance Centers are open from 8:30 a.m. to 4:30 p.m., Monday through Friday. The centers also are open from 9 a.m. to 1 p.m. Saturday. Free tax preparation and filing for individuals and families whose income is $40,000 or less and for those people who normally do not file but need to do so this year to receive the economic stimulus payment is available at the IRS’ Santa Barbara office, 1332 Anacapa St., or at 2384 Professional Parkway, Santa Maria, or 751 Daily Drive, Camarillo.

2. Besides the IRS, Where Can I Get Free Tax Assistance?

Taxpayers who earned less than $40,000 can find the nearest Volunteer Income Tax Assistance site by calling the IRS at 800.906.9887. Call AARP Tax Aide at 888.227.7669 for sites that provide special attention to those 60 and over. Know your ZIP code when calling and remember that some sites serve walk-ins while others require an appointment. Please understand that space becomes very limited this close to the deadline.

3. How Do I Get the Economic Stimulus Payment (Rebate)?

File your required 2007 tax return as you would normally do, and the IRS will do the rest by determining eligibility and sending the payment. This payment should not be confused with any 2007 income tax refund that is owed to you by the federal government. Your 2007 income tax refund will be made separately from the stimulus payment. Selecting direct deposit for your refund will allow the separate stimulus payment to also be direct-deposited into your account starting in May.

People who usually do not file a tax return — such as many seniors, disabled veterans and low-wage earners — and who have at least $3,000 in qualifying income must file the Form 1040A this year to receive a stimulus payment. Click here for more rebate information.

4. What is the Earned Income Tax Credit?

The earned income tax credit (EITC) helps workers who earn under $40,000. A tax credit usually means more money in your pocket. It reduces the amount of tax owed. But to claim it, you have to file a federal tax return and have Social Security numbers for yourself and your qualifying children. In California last year, nearly 2.3 million taxpayers received more than $4.4 billion in EITC, but another 20 percent to 25 percent more people may qualify but are not aware of it. Click here for the EITC Assistant, which is available in English and Spanish and is an easy way to determine eligibility.

5.  Why E-File My Taxes?

E-filing is faster, safer and more accurate, and your tax refund can arrive in as little as two weeks if direct deposit is chosen.  As of April 3, more than 7.3 million Californians had e-filed, a 9 percent increase from the same time last year. Even as Tuesday’s deadline approaches, e-filing still results in getting your refund faster.  But if you paper file close to the deadline, you might not see your refund until around Memorial Day.

6.  How Can I Use the “Free File” Program?

The IRS is working with Free File Alliance, a group of tax software companies, to help taxpayers electronically prepare and file their federal tax returns for free.  Free File is available to taxpayers with adjusted gross income of $54,000 or less. Click here for Free File and follow the on-screen instructions. Last year, nearly 300,000 Californians used “Free File,” but many more could qualify since about half the households in the state have incomes below $54,000.

7.  What If I Can’t Free File or Get to a Free Tax Preparation Site?

The IRS depends on the professional tax preparation community to prepare about 60 percent of all tax returns.  While the overwhelming majority of return preparers provide excellent service to their clients, be as careful in choosing a tax preparer as you are in selecting your doctor or your lawyer.  If you are not able to get an appointment with a professional preparer, consider purchasing software to prepare your own return or find a tax service on the Internet.  And remember that you can use the IRS Web site at any time to obtain forms, instructions and other tax information. Click here for the IRS site.

8.  What If I Owe Money I Don’t Have?

If you have all your records together and are ready to file your return but owe money that you don’t have right now, don’t panic!  File your return by Tuesday and pay as much as you can.  Request that the IRS put the remainder of what you owe on an installment agreement by submitting Form 9465 with your return. By doing this — filing your return even with a balance due —  you avoid the costly “failure-to-file” penalty.

9.  What If I Just Run Out of Time?

If you can’t get all your paperwork together, request an automatic six-month extension of time to file by submitting Form 4868.  This extension only gives you more time to submit your tax return. You will still owe interest on any amount not paid by April 15, plus a possible “failure-to-pay” penalty.  But this penalty is much smaller than the stiffer “failure-to-file” penalty that is charged if you don’t do anything at all.  So, if you can’t get your tax return completed, file extension Form 4868 by Tuesday and pay as much as you can.

10.  When Can I Expect My Tax Refund?

Click here for the “Where’s My Refund?” link, which will guide you to your tax refund’s status.  The system is secure and privacy is ensured.

11.  What about Calls and E-Mails from the IRS?

Watch out for scams!  The IRS does not contact taxpayers by phone or e-mail about tax refunds or stimulus payments. Do not open any e-mails saying that you have a refund or rebate coming from the IRS.  Do not give out personal financial information to anyone posing as the IRS.  These are “phishing” scams being perpetrated by identity thieves trying to steal your personal and financial information.

12 What About Filing for an Unclaimed Refund?

Nearly 150,000 Californians who failed to file an income tax return for 2004 are missing out on more than $134 million in unclaimed refunds.  In some cases, individuals had taxes withheld from their wages (such as college students working during the summer or seniors having a part-time job), but they had too little income to actually require filing a tax return. To collect the money, they must file their 2004 returns with the IRS no later than Tuesday.  When a return was not filed, the law provides most taxpayers with just a three-year window of opportunity for claiming a refund.  Half of those who could claim refunds would receive more than $507. — Victor Omelczenko is an Internal Revenue Service media relations specialist.

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