IRS Suggests Ways to Avoid Problems at Tax Time

For taxpayers looking to avoid the last-minute rush of preparing and filing tax returns, the Internal Revenue Service offers these tips:

1.   Organize Tax Records. Tax preparation time can be significantly reduced for taxpayers who develop a system for organizing their records and receipts. Start with the income, deduction or tax credit items on last year's return.

2.  Don't Procrastinate. Resist the temptation to put off doing taxes until the last minute. Hurrying to meet the filing deadline may cause a taxpayer to overlook potential sources of tax savings and could increase the risk of making an error.

3.  Visit the IRS Online. Everything you need can be found at IRS.gov, 24 hours a day, 7 days a week - forms, instructions, publications, tax law information and answers to frequently asked tax questions.

4.  Take Advantage of Free Tax Assistance. The IRS offers recorded messages on about 150 tax topics through its TeleTax service at 1-800-829-4477. It also offers federal tax forms and publications at 1-800-TAXFORM (1-800-829-3676). Many post offices and libraries carry the most widely requested forms and instructions. Libraries may also have reference sets of IRS publications. Taxpayers needing IRS forms or publications should act soon to be sure they have the items in time to meet the April deadline. The IRS also staffs a Tax Help Line for Individuals at 1-800-829-1040, 7:00 a.m. to 10:00 p.m. on weekdays, and 10:00 a.m. to 3:00 p.m. on Saturdays (all times are local, except in Alaska and Hawaii, which should use Pacific Time). Help for small businesses, corporations, partnerships and trusts that need information or help preparing business returns is available at the Business and Specialty Tax Line at 1-800-829-4933. Hearing-impaired individuals with access to TTY/TDD equipment may call 1-800-829-4059 to ask questions or to order forms and publications.

5.  Use IRS Taxpayer Assistance Centers and Volunteer Programs. Tax help is available at more than 400 IRS offices nationwide. To obtain the location, dates and hours of the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs, call the IRS toll-free Tax Help Line for Individuals at 1-800-829-1040, or check the local newspaper. Finally, find local IRS office locations at www.IRS.gov.

6. Use Electronic Refund Options. One way to speed up an expected refund and reduce the chance of theft is to have the IRS deposit the refund directly into your bank account. Each tax instruction booklet gives details on entering the financial institution's routing number and the taxpayer's account number on the tax return. Make sure to enter the numbers correctly on the form. For checking on the status of a refund, a new Internet option this year is Where's My Refund? Simple online instructions guide taxpayers through a process that checks the status of their refund after they provide identifying information shown on their tax return. The results also include links to customized information based on the taxpayer's specific situation. The links guide taxpayers through steps needed to resolve any issues affecting their refund.

7. File Electronically. More than 50 million taxpayers now file their returns electronically. Why? Because it's fast, cheap and accurate. For those due a refund, the wait time for e-filers is half that of paper filers. This year, the IRS Web site hosts Free File, a free tax preparation and electronic filing program for eligible taxpayers.

8.  Double-Check Math and Data Entries. Taxpayers should review their returns for possible math errors, and make sure names and Social Security numbers or other identification numbers are correct and legible for themselves, their spouses and their dependents.

9.  Don't Panic If Immediate Payment Is Not an Option. If you can't immediately pay taxes due, consider some stress-reducing alternatives. Taxpayers can apply for an IRS installment agreement, suggesting their own monthly payment amount and due dates, and getting a reduced late payment penalty rate. Taxpayers also have various options for charging their balance due on a credit card, either as part of an electronic return or by a phone call to a processing agent. You can reach Official Payments Corporation at 1-800-2PAY-TAX (1-800-272-9829), or at www.officialpayments.com. You can reach The Link2Gov Corporation at 1-888-PAY-1040 (1-888-729-1040), or at www.pay1040.com. There is no IRS fee for credit card payments, but the processor charges a convenience fee. Electronic filers with a balance due can file early and authorize the government's financial agent to take the money directly from their checking or savings account on the due date. Taxpayers who file their tax returns or request for extensions on time, even if they can't pay, avoid potential late-filing penalties.

10. Request an Extension of Time to File. If the clock runs out, taxpayers can get an automatic four-month extension of time to file, to August 15. But an extension of time to file is not an extension of time to pay. Taxpayers may call 1-888-796- 1074, e-file a Form 4868 included in most tax preparation software, or send a paper Form 4868 to the IRS. Those who request the extension by computer or phone will need their adjusted gross income amount from their 2007 tax return. Taxpayers who charge their expected balance on a credit card don't have to file the form. Contact Official Payments Corporation or Link2Gov Corporation. There is no IRS fee for credit card payments, but the processors charge a convenience fee. The extension itself does not give a taxpayer more time to pay any taxes due. The taxpayer will owe interest on any amount not paid by the April deadline, plus a late payment penalty if at least 90% of the total tax due has not been paid by April 15.

The IRS provided the content for this article.