File taxes online, urges IRS


Published: Thursday, January 25, 2007 at 6:01 a.m.
Last Modified: Wednesday, January 24, 2007 at 2:26 p.m.
No need for a degree in accounting to be financially savvy around tax time. You just need to know there are resources available that can save you money and credits to claim that will reduce your tax bill.
This year, 70 percent of all taxpayers, or those with taxable income of $52,000 or less, will qualify for Free File (www.irs.gov/efile), a partnership of 20 software companies and the Internal Revenue Service that offers free online tax preparation and e-filing.
That means more folks can use it than ever before. In an attempt to be more consumer-friendly, FreeFile partners won't be offering refund anticipation loans or blast you with ads for other products as they did in years past.
Unfortunately, the companies are still allowed to make their own eligibility rules, so read carefully to make sure you qualify for no-cost filing. And expect to pay for filing your state return.
Young people often lament their starter salaries. But earning below $38,000 means you may qualify for free face time with volunteer tax preparers using the IRS-coordinated Volunteer Income Tax Assistance Program (VITA). Call 1-800-829-1040 to find a VITA site near you.
Another way to put more money in your pocket during tax time is with tax credits and deductions. You must file a tax return to benefit from them, even if you aren't required to do so.
For those of you who never file a return, listen up. Not only could you be missing out on the earned-income tax credit targeted at low-income workers, but this year you'll also be giving up your share of the telephone excise tax refund, a one-year-only rebate for the tax you paid for long distance between March 2003 and the end of July 2006.
You don't have to comb through old phone bills to add up the tax you paid, although you might want to go to the trouble if you have multiple phone lines or you racked up huge bills talking to your girlfriend overseas.
The rest of us will receive refunds worth $30 to $60, depending on the number of dependents.
To receive the credit, you must ask for it. Thankfully, to easily and quickly file, the IRS came up with the form 1040EZ-T just for you.

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