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Consumer Focus: Tackling Your Taxes

Tackling Your Taxes The holidays are over and spring is just a few short months away. That can only mean one thing - it's tax time. Start tax season off on the right foot--get organized and begin early. Here are some tips to help you along the way. Learn more about: Getting Started Toll-free Numbers to Assist Taxpayers Avoiding Scams Your Witholding Electronic Payment Options A New Tax Filing Season Other Resources E-mail this Information to A Friend Other Topics in the Consumer Focus Archive Getting Started A good place to start is by getting organized. Find helpful hints and information on how to get your files organized in our 2002 Consumer Focus on Taxes. Over the years, the IRS has made filing your taxes easier by giving taxpayers options on how they can file. You can file your taxes by mail, telephone or electronically. Mail If you choose to mail your tax returns, you will need the proper IRS forms. You can obtain the forms and publications by one of the following methods: Phone (1-800-TAX-FORM) Local IRS offices Many Post Offices Many libraries Online Fax 703-368-9694 (you will need Publication 2053) Once you have decided how to obtain your forms, you can click on your state or the international filing link on the "Where to File" page of the IRS website to find the correct address to send your return. Telephone Qualified taxpayers who receive the TeleFile booklet in the mail can file using the TeleFile toll-free number. You will need a touch-tone phone, your tax information and about ten minutes. TeleFile will compute the earned income tax credit, new rate reduction credit and 10% tax rate for dependents, if you are eligible, and automatically figure the amount of your refund or balance due. There are no forms to mail in, and TeleFile gives you a confirmation number at the end of the call to confirm your filing. Electronically You can e-file your taxes using a tax preparer or a computer. E-filing offers a quick, easy and accurate alternative to the paper return. Your forms cannot get lost in the mail and you can either receive your refund through direct deposit or pay your balance by using the electronic payment option. Top

Toll-Free Numbers to Assist Taxpayers The IRS has some new toll-free telephone numbers to help provide taxpayers with better service. Here is a list of frequently used numbers. IRS Tax Help Line for Individuals (800) 829-1040 Forms and Publications (800) 829-3676 National Taxpayers' Advocates Help Line (877) 777-4778 Telephone Device for the Deaf (TDD) (800) 829-4059 Extension to File Tele-file System (888) 796-1074 Top

Avoiding Scams Be on guard for tax scams. If the deductions promised sound too good to be true, they probably are. Scam artists make money by making you believe that you don't have to pay taxes. If you don't pay the correct amount of taxes owed, *you* will be the one responsible for paying any sort of penalty incurred. You can read more about the current tax scams on the IRS's Criminal Investigation website. It is also important that you report any tax fraud activity to the IRS. The toll-free telephone number to report suspected tax frauds and scams is (800) 829-0433. Top

Your Witholding If you worry about taxes every year because you don't know whether you'll owe more taxes or whether you'll get money back from overpaying, you can now ease the uncertainty. The IRS has developed a Witholding Calculator that will help you determine what your tax witholding should be for the next year. By predetermining your witholding, you can better assure yourself that you won't either overpay with money that you could be using throughout the year or underpay and end up owing a lump sum at the end of the year. After calculating your witholdings you will need to update your W-4 with your employer or if you are self-employed adjust what you are paying. If you have underestimated your taxes, you can now pay electronically. Top

Electronic Payment Options for Individuals Most individual taxpayers can pay the taxes they owe electronically if they file using the telephone or using a computer. Electronic payment options give taxpayers an alternative to paying taxes by check or money order. Payments can be made 24 hours a day, 7 days a week. You can choose one of two electronic payment options, Electronic Funds Withdrawal or credit card. Either option is a convenient, safe and secure method for paying individual income taxes. You can also use the Electronic Federal Tax Payment System if you enroll in advance. To receive an enrollment form or more information, called EFTPS Customer Service at (800) 555-4477 or (800) 945-8400 or visit the EFTPS website to enroll online. Top

A New Tax Filing Season It goes without saying… after we ring in the New Year, the IRS rings in the new tax-filing season! And there's some good news when it comes to filling out your tax return. Whether you are an individual or business taxpayer, you'll find that changes to the tax law may cut your taxes. You may even have fewer forms to fill out. Some of the changes for the 2003 filing season: People won't need to list payers of interest or dividend income on a separate schedule unless that income exceeds $1,500. A new 10-percent bracket was added to the rate schedule, and most tax rates have decreased by one-half of a percent point. More working families may qualify for the Earned Income Tax Credit. Education incentives include tax deductions for teachers and for tuition and fees for higher education. You may be able to contribute more to retirement plans, get larger tax benefits for doing so and have more options for handing plan distributions. Top

Other Resources This is just a brief overview. For more information check out these resources. Read these publications online or order them from FCIC: Ten Questions to Ask When Choosing a Financial Planner Top 10 Ways to Prepare for Retirement The Consumer's Almanac Publications available for ordering from the Money Page *Websites:** Internal Revenue Service Department of Justice Tax Topics H&R Block SmartMoney.com Tax Guide * Names of resources and organizations included in this online article are provided as examples only, and their inclusion does not mean that they are endorsed by the Federal Citizen Information Center or any other Government agency. Also, if a particular resource or organization is not mentioned, this does not mean or imply that it is unsatisfactory. If you click on these links, you are leaving FCIC's website. Please bookmark us before you leave so you can return easily. FCIC is not responsible for the content of these websites. Top*

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