New from the Money Scoop

E-File your taxes

E-filing

E-file logoAccording to the IRS, 90 million people filed their taxes electronically in 2008. There are many advantages to e-filing your taxes – it’s easier, it reduces the risk of error and you’ll receive your refund faster (especially if you use direct deposit to receive your refund electronically). According to the IRS, e-filing is “virtually error-proof with an error rate of less than one percent.” There are three ways to e-file:

Go to a Tax Professional

See an authorized e-file provider who can electronically file e-files your taxes for you, usually at a fee. Fees may vary depending on the tax professional you choose and the specific services requested.

Do it Yourself on your Computer

Use purchased / free software on your home computer.

Free File (IRS)

If you made less than $56,000 in 2008, you can e-file your taxes directly with the IRS through their Free File program. It offers:

  • Free service
  • Services in English / Spanish
  • Automatic accuracy checks
  • Quick refunds (sometimes less than 10 days)

Note: Free File only works with your Federal taxes – you still need to file your state taxes.

What if you cannot pay your taxes?

If you have lost your job, your home or are in serious debt, the thought of paying taxes on top of all this may make you want to pull your hair out. The IRS has released the following resources to answer questions about paying taxes while under financial duress.

Example: What if I can’t pay my taxes?
“Don’t panic. If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS to discuss your payment options at 1-800-829-1040.”

Job Related

What if I lose my job?
What if I receive unemployment compensation?
What if my income declines?
What if I am searching for a job?
What if my employer goes out of business?
What if I close my own business?
What if I withdraw money from my IRA?
What if my 401(k) drops in value?

Debt Related

What if I lose my home through foreclosure?
What if I sell my home for a loss?
What if my debt is forgiven?
What if I am insolvent?
What if I file for bankruptcy protection?

Tax Related

What if I did not receive an economic stimulus payment?
What if I can’t pay my installment agreement?
What if there is a federal tax lien on my home?
What if a levy on my wages is creating hardship?
What if I can’t resolve my tax problem with the IRS?
What if I need legal representation to help with my tax problem but can’t afford it?