Minden Press-Herald

Thursday
Apr 24th

Filers net extra days

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Taxpayers have two extra days to file their taxes this year and if the procrastination trend continues, they will need them.

More than 30 percent filed the week before Tax Day or later via extensions in 2011, and Internal Revenue Service statistics show a similar pace this year.

Minden H&R Block owner Gail Cothran said she has noticed more people waiting to file than in previous years.

"What we're running into is that most (last-minute filers) feel like they are going to have big tax liabilities, and they are afraid they are not going to be able to handle it," Cothran said. "Sometimes it's not as bad as you think it is."

According to Cothran, the IRS offers a number of options to delay the inevitability of the tax bill.

Taxpayers who were unemployed during 2011 may be able to extend their tax bill until November 15 without penalty or interest. Filing a regular extension will avoid late filing penalties, however, late payment penalties and interest will still apply. Extensions still must be filed by April 17.

"Filing an extension is easy to do," Cothran said.

Here are some tips for end-of-season tax filers to keep in mind:

n Don't rush – Deductions can be missed. Simple math errors and errors in important personal information can be made.

Returns can be delayed if taxpayer and dependant numbers don't match; also if rounded figures, the previous year's PIN or adjusted gross income are estimated. To help avoid an audit, don't rush.

n Check deductions – Contributions to an individual retirement account up to April 17 are deductible. Un-reimbursed moving expenses may be deductible, as are qualifying charitable donations and medical expenses in excess of 7.5 percent of adjusted gross income.

For those who enjoy the boats, gambling losses are also deductible.

n Get help – Online and other computer tax preparation methods usually walk the taxpayer through all possible steps. H&R Block and others offer free phone advice as well.

Significant life changes such as having a baby, buying a house or making a withdrawal from a retirement account may warrant professional tax preparation.

n File an extension – Whether online, on paper or through a tax preparer, filing an extension on time can save penalties and interest. A 120-day extension is granted automatically.

Late filing costs five percent per month, late payment costs around 0.5 percent and interest runs 3 percent per year compounded daily.

n Pay something – an installment agreement can be set up for a fee ranging from $43 to $105 and payment will not be delinquent.

n Always file – Avoid the temptation to ignore taxes.

Not filing a return when required is considered income tax evasion with penalties that include paying back taxes, interest and possible fines, and possibly even serving a prison sentence in the most serious cases.

(The Associated Press contributed to this report.)

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