Tax day (April 15th) is right around the corner. Believe it or not you have less than six days to wrap up your taxes without being hit with severe penalties, and many post offices (including the post offices in Sacramento, California) will not be open late to help tax payers avoid those penalties. If you’ve avoided doing your taxes due to cost, or you prefer waiting until the last day you’re in luck! Laura Scherler is United Way Worldwide’s, Director of Income Capacity Building and she joined me for an interview yesterday to answer every question you may have about doing your taxes- from what materials you should have on hand, how to claim the right credits, why doing your taxes online is the way to go, how to receive your federal and state income tax returns quicker and how those who earn $58,000 can have their taxes done for FREE!
Candace Rose: With April 15th nearly upon us, what should people be aware of during this last week of tax season?
Laura Scherler: “I think it’s really important for people to keep in mind the tax filing deadline and to file their returns by the deadline if it’s at all possible.
If people do need extra time to file, they can go online to the IRS’ website and file an extension. But you have to keep in mind that that’s not exactly an extension of time to pay your taxes. So if you do owe money to the IRS you’ll have to go ahead and pay that now or at least pay as much as you can afford to pay and then work with the IRS and set up a payment plan for the remainder of the money. If it’s at all possible for you to file your return by the 15th, that’s actually the best thing that you can do.”
Candace Rose: What materials should those who have yet to file their taxes have ready?
Laura Scherler: “You should have all of your income statements ready – so your W2 form, your 1099 form…anything that lists your earned income for the year. You also need any documents that list non-wage related income. If you have interest income from a bank account or investments, you’ll need those documents as well. You’ll also need Social Security information for yourself, your spouse and any dependents in your household. You’ll need any documentation for payments that you’ve made that might increase the number of deductions on your return and could increase the amount of the refund that you receive. Things like payments to childcare providers or payments for medical care expenses – those types of things could increase the number of deductions that you take and could increase your refund.
Finally it’s important to have your bank account information ready. If you want to have your refund directly deposited into your bank account, you’ll need your account number as well as your bank’s routing number.”
Candace Rose: How can you make sure you claim the right credits on your return?
Laura Scherler: “The IRS website actually has a great list of credits and deductions. If you go to their homepage: IRS.gov, there’s a tab that says credits and deductions, and lists some of the most common credits that people qualify for. It also lists the eligibility requirements for those credits, so people can familiarize themselves with them and when they sit down to file their return, they can ensure that they complete the forms that are required in order to claim those credits.
The two that I think that are most important that people often overlook are the Earned Income Tax Credit and the Child Tax Credit. Both of these can provide significant benefits to workers particularly those with children.”
Candace Rose: What are some common myths when it comes to filing your taxes?
Laura Scherler: “I think people assume that taxes are difficult and that they can’t do them themselves. But, the reality is that a lot of the online tax programs that are out there now really take the guesswork out of taxes for people. Not only do they walk you through a series of questions to determine your eligibility for many of the tax credits that people qualify for like the EITC, but they also check all of your calculations and then check the accuracy of your return at the end, so when you do file it, you feel that your return is accurate and that you’re getting all of the credits and deductions that you qualify for.”
Candace Rose: Absolutely, I couldn’t agree more. I never thought that I would be able to do my own taxes (and I do them on my own). They absolutely 100% make it very easy for everyone.
Laura Scherler: “A lot of the software programs out there are really affordable. Some of the for-profit preparers, particularly those that provide in-person services can be really expensive. Lots of people are on tight budgets right now, many of the online programs are very affordable and it doesn’t have to cost a lot of money to do your taxes these days.”
Candace Rose: Who is eligible to receive free tax services?
Laura Scherler: “United Way Worldwide, Goodwill Industries International, The National Disability Institute and the Walmart Foundation are partnering together on a project called My Free Taxes. We provide Free federal and state returns to individuals and families that earn $58,000 or less. If you meet that income requirement, you should go online to our website, which is MyFreeTaxes.com. You can file your federal and state return for free.”
Candace Rose: Do you have any additional tips or information you’d like to share?
Laura Scherler: “I would encourage people (if they feel comfortable) to file online and get their return via direct deposit. If you get your return via direct deposit, you can have your money in your bank account in as little as seven to 10 days. I know that often times people have plans for their refund – either to pay bills or purchase household items and they really count on that money, so getting in a week to 10 days is really critical. Filing online and using direct deposit is really the fastest way to get your refund.”
Candace Rose: Where can we go for more information?
Laura Scherler: “The best place to go is our website, which is MyFreeTaxes.com. We also provide a helpline for filers that need a little bit of extra assistance whether you have tax questions or need help with software, the phone number is 1-855-My-Tax-Help. You should feel confident using our software knowing that there are customer support specialists out there that can provide you with additional support if you need it.”