Jeanette A. Tucker | 3/15/2006 2:47:27 AM
More than half of all taxpayers pay a tax preparer to file their tax returns. Before using a commercial preparer, however, find out if there is a Volunteer Income Tax Assistance site nearby that can help you prepare your taxes for free, advises LSU AgCenter family economics professor Dr. Jeanette Tucker.
Commercial tax preparers charge an average of $100 to prepare a return that claims the Earned Income Tax Credit. You may pay an additional $100 if you get a refund anticipation loan. Sometimes those loans are advertised as "fast cash" or a "quick-tax refund." They are loans with extremely high interest rates.
"If there is an error on the return, however, and the IRS doesn’t send the refund, you will be stuck having to repay the loan," Tucker warns.
Anticipation loans are sometimes promoted through car dealerships, furniture outlets or jewelry stores that offer to prepare your taxes and try to convince you to use refund loans for in-store purchases. They provide a fast cash loan (one to two days) on your tax refund, but having the IRS refund deposited directly into a bank account takes only about seven to 12 days.
"Is it worth paying $200 or more for just a few days’ difference?" Tucker asks.
If you earn less than about $35,000, you can get free tax filing help through the IRS-sponsored Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs.
Both programs can provide fast electronic tax filing. Community volunteers receive IRS-approved training to assist individuals with tax returns. Some assistance sites can help you open a bank account if you don’t have one.
Call the IRS at 1-800-829-1040 or 205-912-5491 to find the nearest location and its days and hours of operation.
Whether you go to an assistance site or to a commercial tax preparer, be prepared. Take these items with you:
–Valid picture ID.
– Copy of 2004 tax return (if you have it).
– Social Security number or Individual Taxpayer Identification Number for you, your spouse and any children born before Dec. 31, 2005. (If available, bring the SS cards or ITIN letters to ensure information is copied correctly onto the tax return.)
Also, take your income documentation, including:
– W-2 forms from all jobs worked in 2005.
– All 1099 forms showing other income received in 2005.
– A blank check for direct deposit of your refund. (If you don’t have a checking account, bring your bank account number and the nine-digit American Bankers Association routing number. Contact your bank if you need assistance identifying the routing number.)
If any of the following apply to you, take the appropriate documentation with you:
– Child care expenses, including the provider’s address and federal identification number.
– Mortgage company statements.
– Adoption expenses.
– Alimony paid or received.
– Any notices received from the IRS or state tax office.
– Property tax bills.
– College tuition and student loan interest statements.
– Additional forms of income, such as prizes and awards, scholarships and fellowships and lottery or gambling winnings.
If you lost or do not have all of these items, you can still get your taxes prepared. Call the IRS helpline at 1-800-829-1040 to find out what you need to do and how to obtain replacement documents.
For related family economics and consumer topics, click on the Family and Home link on the LSU AgCenter homepage, at www.lsuagcenter.com. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.
On the Internet: LSU AgCenter: www.lsuagcenter.com
Source: Jeanette Tucker (225) 578-1425, or Jtucker@agcenter.lsu.edu