AUGUSTA — Short on cash, time, or both, with the federal and state income tax filing deadline looming about a week away?
Internal Revenue Service officials warn that you should file even if you can’t pay all you owe or don’t have time to complete a full tax return.
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The IRS is willing to work with taxpayers, with options including extensions to allow more time to file and payment plans for those unable to pay all of what they owe.
But first you have to file.
“We realize some people are struggling because of the economy,” said Peggy Riley, the regional IRS spokeswoman. “If you owe money, don’t put off filing. File on time and we can set up an installment plan. We can set up a payment plan in minutes. We’re willing to work with almost anybody.”
Riley also urged taxpayers who don’t have time to prepare their taxes before the coming filing deadline to at least file by paper or electronically for an extension.
However, she noted an extension of the time to file is not an extension of the time to pay.
Taxpayers filing for six-month extensions, by either completing and filing Form 4868 or filing an electronic version of that same Form 4868 using a personal computer, should include a payment for their amount of estimated taxes owed or face paying penalties and interest if they don’t.
Through the IRS’s new Fresh Start program, unemployed taxpayers and others struggling to pay their taxes may qualify for relief from penalties for paying taxes late.
Procrastinators have two extra days to file this year. Normally taxes must be filed by the end of the day on April 15. But this year, the last day you can file taxes is two days later, on April 17. That’s because April 15 is a Sunday, and April 16 is Emancipation Day, a holiday observed in Washington, D.C.
“When there is a holiday in the District of Columbia, we all get it,” Riley said. It’s also a state holiday, Patriot’s Day, in Maine and Massachusetts.
Nationwide, about 77 percent of taxpayers filed their returns electronically last year and Riley expects that number to be the same or higher this year as people become more comfortable transacting business online.
Those making less than $57,000 a year may e-file their tax returns for free through the IRS website at www.irs.gov. Clicking the “free file” link will take filers to the site of one of 20 tax filing firms partnering with the IRS. To file for free, filers must access the partner sites through the IRS’s site.
Riley said e-filing is fast and safe. Last year, 467,000 Mainers e-filed their tax returns.
“You can get your refund back in 14 to 21 days if you e-file,” Riley said. “If you file on paper this time of year it could be four to six weeks before you get your return. You also get a more accurate return, because (the e-file system) does the math for you. And it leads you through a series of questions. So you’re getting the best refund you can get.”
April 17 is a significant deadline for other reasons, too. Nearly 4,000 Maine taxpayers who didn’t file income tax returns in 2008 are missing out on about $3.2 million in unclaimed refunds. To collect the money, however, they must file their 2008 returns with the IRS by this April 17, because the law gives taxpayers who don’t file returns just three years to claim refunds.
Riley said people may not file because they fell below the income levels that require them to file. But they could still be eligible for refunds.
Riley also encouraged taxpayers to review their eligibility for the Earned Income Tax Credit to see if they quality for tax relief. Last year about 99,000 filers collected $187 million through the credit, with an average amount of $1,886.
The credit generally targets low-income working families.
“It can help a lot of low-income families get back on their feet again,” Riley said.
Keith Edwards — 621-5647
kedwards@centralmaine.com
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