“I’ve been getting calls all week,” said Gary Fox, a Cartersville CPA. “I’ve got people coming in Monday. I expect folks to come in Tuesday. If I have time, I’ll do it. If I don’t, I’ll tell them I can extend it and get to it in the next week or two.”
Fox said filers are able to apply for a six-month extension on their income tax. Those six months, he said, often allow small business owners and those with a number of income sources to get their paperwork and deductions organized. However, he said it can be unwise to wait until October to file.
“If you do file an extension and you have a balance that’s due and you don’t pay it with the extension, you’ll have to pay interest on it. It’s better to get them filed as quickly as possible even if you do have to file an extension,” Fox said. “It’s not good to file an extension and then wait until October to file ... because if you have a balance too you’ll be paying interest on all those months that the money’s outstanding.”
The interest is half a percent each month. If filers do not request an extension and file after the Tuesday deadline, the interest rate spikes.
“If you don’t file an extension and you don’t file your return, you just wait until June or July to file it and you have a balance due, not only is there a half a percent interest penalty, there’s a 5 percent per month penalty on the balance that’s due,” Fox said. “So that adds up fast. ... By no means do you not want to do anything.
“ ... If you don’t do anything, they’ll create a tax return for you. Like if all you get are 1099 or W-2 and they don’t get a return from you, they’ll create a return without a deduction. You get the standard deduction and then they’ll send you a bill.”
For its part, the IRS offered the following tips for filers in a press release:
• File electronically for free: There’s no need for filers to hold on to their returns because they owe money. Filers can file electronically now and set their automatic payment for April 15. Filers can e-file through a tax preparer, personal computer and tax preparation software or using the IRS Free File program. The IRS Free File program offers free tax return preparation and free e-filing to individuals with an AGI of $58,000 or less through a partnership with software companies. To Free File, go to the IRS website at www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free, click on Free File and select a software company that meets your needs. Remember, filers must access all Free File software companies through the IRS website. Electronic filing has many benefits. E-filing offers faster refunds, more accurate returns, paperless filing and confirmation within 48 hours that IRS has accepted the tax return.
• Don’t miss out on unclaimed refunds: About 23,000 Georgians who haven’t filed a tax return for 2010 are missing out on more than $28 million in unclaimed funds. To collect these refunds, a 2010 tax return must be filed with the IRS no later than April 15. Half of these unclaimed refunds would be for more than $539.
• More time to file: People who haven’t finished filling out their tax return can get an automatic six-month extension. The fastest and easiest way to get the extra time is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an automatic tax-filing extension on Form 4868.
In addition, filers can request an extension by mailing in Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to the IRS. The form is available on the IRS website.
• More time to pay: Taxpayers who have finished their returns should file by the regular April 15 deadline, even if they can’t pay the full amount date. In many cases, those struggling with unpaid taxes qualify for one of several relief programs. Most people can set up a payment agreement with the IRS online in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement to set up a monthly billing payment for up to six years. Taxpayers can choose this option even if they have not yet received a monthly bill or notice from the IRS. Alternatively, taxpayers can request a payment agreement by filing Form 9465-FS. The form can be downloaded from IRS.gov and mailed along with a tax return, bill or notice.
• Check the identification numbers: When filing a paper return, carefully check the identification numbers — usually Social Security numbers — for each person listed. This includes the filer, a spouse, dependents and persons listing in relations to claims for the Child and Dependent Care Credit or Earned Income Tax Credit. Missing, incorrect or illegible Social Security numbers can delay or reduce a tax refund.
• Double-check figures: If you are filing a paper return, filers should double-check that they have correctly figured the refund or balance due.
• Mailing a return: Use the coded envelope included with the tax package to mail your return. If filers did not receive an envelope, check the section called “Where Do You File?” in the tax instruction booklet.
• Mailing a payment: Filers sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to the tax return or the Form 1040-V, Payment Voucher, if used. The check should include the taxpayer’s Social Security number, daytime phone number, the tax year and the type of form filed.
• Sign the form: Taxpayers must sign and date their returns. Both spouses must sign a joint return, even if only one had income.
• Where to get tax help or forms: The IRS has several options available for tax help and forms. Go to the IRS website at www.irs.gov to get tax forms and publications as well as tax information. Some local libraries and post offices have forms and are open evenings and weekends. Recorded tax information on a variety of tax topics is available by calling 1-800-829-4477. Toll-free telephone assistance is available by calling the IRS at 1-800-929-1040. Free tax help is as near as a community center, school, local library or senior center for thousands of taxpayers this year. Volunteers are on-site at more than 400 locations statewide and are ready to offer free tax return preparation and, at many sites, free electronic filing. Call 1-800-906-9887 for volunteer tax site locations. Help is also available at some IRS offices. Visit www.irs.gov for IRS office locations and hours.