CONSUMER ALERTS

February 2009

New features to make tax season less taxing

The Internal Revenue Service (IRS) offers financially distressed taxpayers several new ways in the 2009 tax filing season to help maximize their refunds and speed payments, while providing additional help to people struggling to meet their tax obligations. You are encouraged to take advantage of new tax credits and deductions, as well as investigate a major enhancement to the Free File program that allows most taxpayers to e-file for free and speed receipt of their refunds.

With many Americans facing financial difficulties, the IRS has taken additional steps to help people who owe back taxes. IRS employees have wider flexibility to assist struggling taxpayers to adjust payments for back taxes, avoid defaulting on payment agreements or possibly defer collection action. If you are behind on payments and need assistance, contact the phone numbers listed on your IRS correspondence.

This filing season, there are several steps you can take to maximize refunds and speed the delivery of money from the IRS. Be sure to look into the numerous tax breaks available and take every credit, deduction and exclusion for which you qualify. If you had less income in 2008, you may qualify for credits for which you were previously ineligible. And there are new benefits this year, such as the First-Time Homebuyer Credit and Recovery Rebate Credit. Visit www.IRS.gov for information on these and other credits, like the child tax credit, the Earned Income Tax Credit and alternative fuel vehicle credit.

Also this year, electronic filing options will speed the payment of refunds to millions of taxpayers. If you e-file and choose direct deposit for your refund, for example, your refund will arrive in as few as 10 days. That compares to about six weeks for those who file a paper form and get a traditional paper check. 

The IRS is again offering free tax preparation and filing through the Free File program. Anyone with an adjusted gross income up to $56,000 can use the standard Free File options this year. The program also has usability improvements, including a standardized set of electronic forms that are most frequently used by Free File-eligible taxpayers.

This year, the IRS and its partners are offering a new option, Free File Fillable Tax Forms, that opens up Free File to virtually everyone—even those whose incomes exceed $56,000. This option allows you to complete and file your tax forms electronically, just as you would on paper, but does not include an “interview” process like the other Free File offerings. It does allow you to enter your tax data, perform basic math calculations, sign electronically, print your finished returns for recordkeeping, and e-file the returns. It may be just right for those who are comfortable with the tax law or those who use electronic software to prepare their returns, but file using paper forms.

Both the fillable-forms option and the previously available Free File offerings are available only through the www.IRS.gov website.

In addition, the IRS is producing a number of podcasts this filing season that will be available on the website. In addition to Tax Tips, Fact Sheets and News Releases, these short audio interviews cover a wide range of topics useful to taxpayers as they prepare to file in 2009.