Friday, February 11, 2011

Time for Taxes? Not Just Yet...

If you’re like most people, you probably have your W-2s and other financial paperwork in a stack at home, but that’s as far as you’ve gotten on your income tax preparation. In fact, the Internal Revenue Service has even requested that some people not file their 2010 returns until mid-February, so its processors have time to prepare for changes made by 2010’s tax law overhaul. It looks like 2011 will be an especially good year for tax procrastinators: the little-known Washington, D.C. holiday of Emancipation Day (CNN story) will be observed on the usual tax deadline of April 15, pushing back the dreaded day an extra weekend to Monday, April 18 instead.

However, most taxpayers can file 2010 returns as soon as they are ready, and just need to find the time and energy to tackle their taxes. Although the Goodson Law Library staff is not able to answer substantive tax-related questions (such as “what forms do I need to file?” or help with interpreting the form instructions), the Goodson Blogson is happy to point you to some starting places.

Before you pay for a professional tax preparation service, consider whether you qualify for the IRS FreeFile program. This service links qualifying taxpayers to free electronic federal tax preparation service (state tax preparation may also be available in some cases). Note that your adjusted gross income must be $58,000 or less in order to take advantage of the FreeFile program.

You might also qualify for assistance from VITA (Volunteer Income Tax Assistance), a program in which trained volunteers assist with preparation for low- to moderate-income taxpayers, as well as senior citizens. Duke Law’s VITA chapter has posted their schedule for spring 2011; please note that advance appointments are required at some sites. For readers outside the Durham area, the IRS maintains a list of VITA sites around the country.

If you don’t qualify for free assistance, or would prefer to tackle your own taxes, you might consider trying a software program or online filing service like TurboTax or H&R Block at Home. Earlier this month, Consumer Reports provided some helpful tips to help evaluate which option is right for you.

If your taxes turn out to be too complicated, you might need to hire a professional. The IRS has tips for choosing a tax professional as well as instructions for filing complaints against any bad apples out there.

Good luck—and for the perpetual procrastinators, there’s always an automatic extension (but don’t get too excited – it’s an extension to file, not an extension to pay what you are estimated to owe!).