Nearly four in 10 Americans consider cutting their own hair less dangerous than preparing their own taxes, according to a survey from OfficeMax.
Time to take out the scissors. Millions of taxpayers still haven’t filed, with a delayed but now looming deadline of midnight Monday.
A steady flow of customers came in and out of the H&R Block office near Belmar in Lakewood on Friday morning. Some were unaware they had three extra days this year.
“I thought today was the filing deadline,” said Chelsy Ragan, who was having her taxes done with 2-year-old daughter, Shia, and friend Jake Lee.
She said she breathed a sigh of relief when she realized she wasn’t last-minute. Normally an early filer, things got away from her this year.
“It was a matter of finding time,” she said.
Emancipation Day, a holiday celebrated in Washington, D.C., fell on a Saturday this year. Workers there received April 15 off, and everyone else got three extra days to file.
Most people delay filing because they owe. But Mike and Alison DuVarney were waiting for K-1 tax statements for their youth sports camp business, SkyHawk Sports.
When they filed Friday, the news was good. They have a $6,000 refund coming, which they plan to use on home improvements.
H&R Block offers a free “second look” or review of returns prepared elsewhere. Deb Nelson, a senior tax adviser and instructor, said a few things stand out this filing season.
Some taxpayers are overlooking the American Opportunity Credit, which provides up to $2,500 for qualified educational expenses. That credit is available only in 2009 and 2010.
The Adoption Credit, which was taken in limited bites in the past, is fully refundable on returns this year, generating some big refunds. Nelson said she knows of one family with special-needs children that received a $54,000 refund.
The Home Energy Efficiency Improvement Tax Credit provides up to $1,500 for purchases, like new windows or insulation, made in 2009 or 2010. That credit drops to $500 for purchases made in 2011.
This is the last year for the Making Work Pay credit of $400 per person, barring an extension by Congress.
Among the problems Nelson has run across are rejected returns for some people claiming the $8,000 homebuyer tax credit available in 2009 and early 2010.
That credit replaced a 2008 program that provided a 15-year loan repayable in $500 increments each year off the tax return.
In some cases, the IRS is rejecting returns filed electronically because it thinks taxpayers are under the 2008 program and owe the government $500.
Avoiding an audit
Only about one in every 100 tax returns gets audited. Below are some common ways to get in trouble with the IRS.
1) Submitting a handwritten return with miscalculations or omissions.
2) Not reporting all income. The IRS has a document-matching program that looks for inconsistencies in reported income against what is on W-2s that report wages, 1099-INT forms that report interest, 1099-DIV forms that report dividends and 1099-B forms that report proceeds from stock sales.
3) Submitting ineligible business expenses on Schedule C. Eligible expenses include advertising, insurance, legal services, vehicle expenses, employee wages and taxes, home office expenses and depreciation.
4) Not filing a return just because you are unemployed. All unemployment benefits are taxable this year. Last year, the first $2,400 was tax free. If income exceeds the filing threshold for a taxpayer’s filing status, a return must be filed.
Source: H&R Block
