Last-minute tax tips
If you haven’t sent in your return yet, here are some things to keep in mind:
Deductions: Before automatically taking the standard deduction, try this quick test. Add up your mortgage interest, real estate taxes and the amount of state and local tax withheld listed on your W-2. If you live in a state with no income tax, use the sales tax deduction calendar on www.IRS.gov and substitute that figure. If your total comes to more than the standard deduction, you’ll benefit from itemizing.
Tax credits: If your income declined last year, you might be eligible for tax credits you couldn’t claim in the past. The earned income tax credit, child care credit and the Hope and Lifetime Learning education credits are all income-based, so even if you couldn’t claim them before, check to see if you can now. Unlike itemized deductions, credits are subtracted from your tax liability dollar for dollar.
Medical costs: Be aware that medical costs that equal 7.5 percent or more of your adjusted gross income are deductible. If you had a major medical expense last year, or several smaller ones, it’s worth adding up your receipts to see if they meet the threshold. This is another area that might benefit many whose income fell.
Investments: If you’re planning to claim investment losses, make sure you know their basis, or the value when you first got the stocks, bonds or mutual funds There are some Web-based calculators, but the best resource is the original paperwork.
Charitable deductions: The IRS has tightened rules for charitable deductions, and you now must have paperwork to back up any donations you claim.
Homebuyer tax credit: If you plan to buy a house this year, fill out an extension from the IRS instead of filing. A new $8,000 first-time homebuyers credit for purchases through Dec. 1 can be claimed on last year’s taxes, Scharin noted, so it could make sense to delay filing until the closing.
The Associated Press
Keturah McDowell is bracing for the final days of tax season.
McDowell, a tax preparer with Liberty Tax Service on Dawsonville Highway in Gainesville, is expecting a rush of customers on the final three days of the season.
But just like there will be a wave of customers this week, she had plenty in the early days of the filing season, too.
“They came in earlier in the year,” said McDowell, who added that many of the early customers had refunds and wanted to get them to pay expenses.
McDowell is not alone in getting ready for the last-minute rush.
Barclay Rushton, a Gainesville CPA, said he and his colleagues will be putting in long hours through Wednesday, taking off only today for Easter.
“But I’ll be here late Saturday night and early Monday morning,” he said.
This year, Rushton’s clients are filing much different returns.
“Everybody is late this year,” Rushton said. “They don’t have any big capital gains they’re worried about. They don’t have any big land sales where they were worried about a tax liability.”
Some of his clients will be getting refunds. Rushton said the refunds are largely due to some of his clients having significant losses.
“That’s really not good news,” he said.
A spokesman for the Internal Revenue Service said many Georgians have already filed, but the rush will come this week.
“In any given year, there is a trail of individuals who wait until the last minute to file,” said Mark Green of the IRS. He theorized that many taxpayers who owe money are waiting as long as possible.
Green said more filers are filing via the Internet.
“Out of 4 million returns, about 2.8 million will be filed electronically,” Green said. “As of Thursday, we’ve had a little over 2.4 million returns filed electronically.”
Filing an electronic return costs the government much less. Green said a typical electronic return costs 35 cents to process, while it costs $2.85 to process a paper return.
An individual or couple making less than $56,000 adjusted gross income can file electronically for free by using tax preparation software provided at irs.gov.
“We will walk with you step by step,” Green said.
He also encouraged use of direct deposit for refunds. He said an electronic return filed using direct deposit will get the taxpayer a refund in as little as eight to 10 days.