Q: Which Forms Can I File Using MYEFILETAX.com?

A: MYEFILETAX.com completes and files the 1040EZ and the 1040A form. Both forms require that you use the standard deductions.

Q: Should I E-File?

A: The IRS actually prefers e-filing because it reduces tax preparation errors by as much as 90% and helps the IRS review tax returns more quickly. People who fill out and submit a paper return are much more likely to experience delays in receiving their refunds; most often because their returns contained simple mistakes or were mailed to the wrong address. E-filing also insures that the tax data you entered goes directly into the IRS’s system exactly as you entered it. If you mail in a paper return an IRS clerk has to manually enter all your tax information into their system, adding one more layer of work that could potentially lead to errors and delays in your tax return processing.

Q: What is the Deadline for Filing my Tax Return? If I Owe Money, When Is It Due?

A: Tax returns and payments are always due by April 15th; if April 15th falls on a Saturday or Sunday, taxes are due by the following Monday. Tax returns filed after April 15th are subject to a failure to file penalty equal to 5% of your balance per month up to 25%. If you owe Uncle Sam money the failure to file penalty is reduced to 4.5% but an additional failure to pay penalty of 0.5% is tacked on, bringing the penalty back to 5% per month, plus interest!

Q: Who Do I Make the Check Out To?

A: All checks should be payable to the United States Treasury and should include your social security number, tax form number and tax year in the memo line.

Q: Can I Pay Using a Visa, MasterCard, American Express or Discover Card?

A: The IRS accepts credit card payments through two approved vendors. Both companies accept Visa, MasterCard, American Express and Discover Card and charge a convenience fee around 2.5% of your tax bill.

Official Payments Corporation can be reached at www.officialpayments.com or 1-800-2PAY-TAX (1-800-272-9829)

PhoneCharge can be reached at www.1888ALLTAXX.com or 1-888-ALL-TAXX (1-888-255-8299).

Q: Can I Pay Through the Internet Using My Checking or Savings Account?

A: The electronic funds withdrawal can be made through most online tax preparation and e-file software. Please have your banks routing number and your account number available.

Q: What If I Can’t Pay My Tax Liability By April 15th?

A: Leaving a balance on your tax liability can cause some serious penalties to be added. If you can’t meet your entire tax obligation by April 15th pay as much as you can. Then look into any low interest loans you are eligible for. Only use credit cards with very low interest rates for paying tax liabilities and pay off the balance as soon as possible to avoid any raise in interest rates.

Q: Does the IRS Offer Payment Plans?

A: The IRS charges a user fee to set up your installment agreement. The user fee for new installment agreements entered into after January 1, 2007 is $105 and $52 for agreements where payments are deducted directly from your bank account. Taxpayers with income at or below established levels, based on the Department of Health and Human Services poverty guidelines, can apply and be qualified to pay a reduced user fee of $43 for establishing new agreements including agreements where payments are deducted directly from your bank account. Information about requesting the reduced user fee will be included in installment agreement acceptance letter sent to individuals.

There is also a user fee of $45 effective January 1, 2007 regardless of income level for reinstating defaulted agreements or restructuring existing agreements. If you already have an approved installment agreement from a previous tax debt and your financial situation has changed, we may be able to modify or restructure your installment agreement to include additional amounts owed into one agreement.

To request an installment agreement, send Form 9465 (PDF), Installment Agreement Request, with your return or call (800) 829-1040. You should receive a response within 30 days. For more details on installment payments, refer to Tax Topic 202, What to do if You Can't Pay Your Tax, or Publication 594 (PDF), Understanding the Collection Process.

Q: What Happens If I Don’t Pay My Tax Bill?

A: The IRS tends to get very cranky with people who don’t pay their tax liability. If you don’t pay, a number of things could happen to you. Most likely you’ll get some not so pleasant letters from Uncle Sam reminding you of your obligation. If that doesn’t convince you to pay up then the IRS still has a couple of options. They can request a court judgment against you that allows the IRS to garnish your wages or they can attach a lien on your house and force the property to be sold. All the while interest and penalties keep accruing raising the amount you owe indefinitely.

Q: How Can I Avoid Owing Taxes In the Future?

A: Using the IRS Withholding Calculator found at (http://www.irs.gov/individuals/page/0,,id=14806,00.html.) you can determine what entries on your W-4 will withhold the correct tax liability from your paycheck each pay period. After you know what numbers to put on the W-4 form, ask your HR representative for a new form, fill it in and hand it back. You should be OK after that.

Q: How Do I get an Extension?

A: Almost everyone can request and be granted an extension until October 15th by filing Form 4868 by April 15th. If you live outside the US or are in the military stationed outside the US you have until June 15th to file your taxes. Simply include a letter stating your living situation with your taxes. This extension is also granted to couples filing jointly when one spouse is living outside the country.

Q: Which Form Should I Use?

A: If you are claiming only the standard deductions you can use the 1040 EZ or the 1040A, but if you are itemizing your deductions file using the 1040 and any applicable schedules. Make sure your social security number is written at the top of each tax schedule. If filing jointly, both yours and your spouse’s signature must be on the tax return.

Q: What Status Should I Claim?

A: You get 5 choices: married filing jointly, married filing separately, widow/widower, head of household and single.

If you said “I do” on or before the last day of the year you have to file as married. Generally, you’ll pay less in taxes if you file jointly, however there are some circumstances in which it is beneficial to file “married filing separately.” If you and your beloved can’t agree on some of the particulars of a tax return you may just want to agree to disagree and file separately so each of you are only responsible for your own return. In other cases, if your spouse has high medical expenses or other extenuating circumstances it may pay to file separately. When in doubt, prepare your taxes both ways and see which one gives you the most benefit.

If your spouse passed on within the past two years, you have a minimum of one dependent and you pay for at least half of the upkeep of your home you can file as a widow/widower.

To file as head of household you must have at least one dependent and pay more than half of the upkeep for the house in which the dependent lives.

And when all of the above doesn’t apply you must file as single.

Q: Should I Choose Direct Deposit For My Refund?

A: Choosing direct deposit generally allows you to receive your refund in 10-14 days and is safer than requesting a paper check be sent to you.

Q: What Are the Standard deductions for this year?

A:
Single: $5,350
Head of Household: $7,850
Married Filing Joint: $10,700
Married Filing Separately: $5,350
Qualifying Widow/Widower: $10,700
Dependent: $850-$5,350*
Additional Amount if Blind: $1,050
Additional Amount if age 65 or older: $1,050
* Dependents must calculate their standard deduction using an IRS Worksheet.

Q: Should I Itemize?

A: Itemize your deductions if the sum of your allowable deductions exceeds the standard deduction amount. Married couples filing separately must both either claim the standard deduction or itemize. All non-resident aliens and dual status residents must itemize their deductions. If you’re using a computerized tax preparation program it will usually tell you whether itemizing your deductions will provide the greatest benefit to you.

Q: When Should I Contact a CPA?

A: If you have questions about your tax liability, don’t understand what the tax return form is asking for or begin feeling overwhelmed it’s best to contact a CPA. Better to spend a little extra money upfront and know that your taxes are done correctly than chance it and have the IRS knock on your door.