Income tax forms due in by midnight

Posted: Tuesday, April 15, 2003

Taxes done yet? If not, one may be hard-pressed to get them completed and sent off by the close of the filing deadline tonight.

The annual ritual of last-minute filing will grind to a halt this evening when the clock strikes 12, and taxpayers and tax preparers, alike, are working overtime to beat the fast-coming midnight cutoff and get 2002 returns filed on time.

The Internal Revenue Service is expecting about 132 million people to file income tax returns this year, said spokesperson Judy Monahan. She said the IRS was more than halfway to that goal with more than 80 million returns counted as of last week.

"And 25 percent of those were filed in the last four days," Monahan said Monday from her Seattle office.

In Alaska, she said there were 100,494 federal individual returns filed electronically as of Monday and 113,000 mail-in returns counted at the end of last week.

For last-minute filers, however, dragging feet could be the result of unanswered questions. Tax filers can call the IRS toll-free line, (800) 829-1040, and speak to a live tax adviser today from 11 a.m. to 7 p.m. But more than one call to the hot-line Monday found it backlogged, suggesting callers try again later.

"That's not a surprise," Monahan said, pointing out that extensions of that site could be helpful in answering inquiries and even speeding the return process or tracking refunds. "I would encourage people to go to www.irs.gov. One of the most popular (links) is 'Where is my refund?' Another one is 'Free File.'"

Monahan said the IRS is encouraging electronic filing (e-filing) -- filing either over the Internet or the phone. She said the process significantly cuts into the time it takes to receive a refund and minimizes the paperwork for both the filer and the IRS.

Taxpayers who qualify to fill out form 1040EZ are able to file by phone. But those who qualify are selected by the IRS and usually will have received an instruction manual to help with the process.

Many people choose to go to accountants and professional tax preparers who, for a fee, are able to handle returns either via the mail or online.

The "Free File" link is on the IRS Web site and lists 17 tax preparing partners that will e-file returns at no charge, depending on a filers' qualifications generally based on income.

The "Where is my refund?" link keeps tabs on tax filers' anticipated refunds, including letting them know approximately when they can expect to receive a check or direct deposit.

Monahan said the refund tracking program was experiencing a four-week lag with mailed-in returns.

Attempts to get professional help completing the 2002 federal income tax return may be difficult if no last-minute help has been arranged.

Many professional tax preparers, both certified public accountants and enrolled agents, have found themselves booked up with clients.

Kathy Hammer of Burnett and Hammer Inc. acknowledged she was busy before hurriedly offering advice.

"I always suggest that taxpayers really should go to a professional and file electronically," she said before returning to a client.

Joe Moore, a CPA with Altman, Rogers and Co. in Soldotna, said he stopped filing returns last week and began doing extensions.

"I won't do anybody's return," he said, referring to his current workload of extensions that give taxpayers until Aug. 15 to turn in correct filings.

He suggested taxpayers struggling to complete returns at this late date forego a completion and apply for an extension.

"File Form 4868," he said. "It's better to do that than try and rush it and make a mistake. If you do owe, you should pay with an extension."

Many people want to do their taxes themselves and would rather send them in via the regular standard. For taxpayers who prefer mailing in paper returns over electronic returns, forms are available at both the Kenai Community Library and Soldotna Public Library.

Sending the returns by mail will be the issue, however, as a rush surges on the post offices. However, some post office branches are making arrangements to accommodate filers who have to drop returns off at the wire.

The counter at the Ninilchik branch will close at 5 p.m. today, but postal worker Christy Drake said taxpayers could drop their returns off by midnight and still have the return postmarked.

"We'll come back and cancel them," she said.

The Kenai branch also will postmark returns dropped by midnight.

Traffic at many of the postal centers has increased over the past week, as more taxpayers stop by to get the postal stamp before the deadline.

"We've been pretty constant," Drake said.

Margaret Merrill, postmaster at the Soldotna Post Office, said she saw a usually busy Monday get a bit of a boost to business.

"I have noticed that there are a few more people sending taxes, but tomorrow is when it will be crowded," Merrill said Monday.

People mailing out their returns Monday were there for a variety of reasons. Soldotna resident Christina Johnson said she would normally have her taxes completed sometime in March. But this year was an exception.

"I was overseas for a while in Austria," she said. "That's why I'm here today."

Roland Zumwalt of Soldotna said he was filing taxes at the last minute and didn't have a good reason.

"I'm just lazy," he said with a chuckle. "You may as well put it off. I didn't want to pay."

Paying taxes owed may give some cause to put off filing their taxes, but Monahan said the penalties for procrastination can be unsavory. And the IRS has ways to help with payment.

Those who cannot pay the full tax due may qualify for an installment payment plan. The IRS offers an streamlined approval process if the amount due is not more than $25,000 and the taxpayer will pay it within a five-year period. Form 9465 can be attached to a return to request a payment plan.

There is a $43 fee for setting up the installment agreement. Taxpayers also will pay interest -- currently figured at 5 percent per year -- plus a late payment penalty. This penalty, usually 0.5 percent of the balance due per month, drops to 0.25 percent when the IRS approves the agreement for an individual taxpayer who filed the return on time and didn't receive a late notice.

"Besides possibly qualifying for this reduced-late payment penalty, people who cannot pay the taxes owed have another reason to file on time -- to avoid the late filing penalty of 5 percent per month of the balance due," Monahan said.

"Sending as large a payment as possible with the return will lessen any interest and penalty charges."



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