A Taxing Time of Year

Despite the flowers, the birds and the nice weather, April can indeed be the cruelest month – because of tax time! The roots of “internal revenue” go back to the Civil War, when President Lincoln enacted the income tax in 1862 to pay war expenses (thanks, Abe). It was repealed 10 years later, revived in 1894, ruled unconstitutional in 1895 – but by 1913, the 16th amendment had been ratified, giving Congress the authority to enact a tax on income. Since then, the tax code has become increasingly complicated, giving CPA’s a reason to live (or find another occupation, depending on your point of view). Here are a couple of general tips to remember THIS year as you get ready to send your fiscal love note off to Uncle Sam:

-Beginning in May, those economic stimulus checks from the government will be hitting the mailboxes of 130 million homes. To get yours, you need a valid Social Security number, $3,000 of qualifying income and to file a 2007 return. Even if you’re not required to file (such as if you’re a disabled veteran or low-wage worker), you still need a tax return to get the stimulus check. Find out more by checking Economic Stimulus Payments Information Center at www.irs.gov.

-Consider e-filing your taxes. Many of us can e-file for free; you’ll receive an acknowledgement that your return has been received and accepted for processing. Best of all, when you e-file and choose direct deposit, you may get your refund in as little as 10 days.

-Don’t go it alone. There are hundreds of free IRS volunteer tax help sites near you, at libraries, senior centers or college campuses. Volunteers will help do basic tax returns, answer questions and more. Find the nearest site by calling the IRS at (800) 906-9887.

-Watch out for tax scammers who try to steal your identity. If you receive unsolicited e-mail or calls from anyone purporting to be from the IRS, don’t fall for it. The IRS has compiled the “Dirty Dozen” tax scam list and you can find it at www.irs.gov.

-Procrastinators, rejoice: you can get an automatic six-month extension to file your returns by Oct. 15 [IRS form 4868, which can be filed electronically or by mail]. However, the extension DOESN’T give you more time to pay any taxes due. You’ll owe interest on anything not paid by the April deadline, plus a late payment penalty if you haven’t paid at least 90 percent of your total tax by then.


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