Tax season.
Two little words that can make the hair stand up on the back of your neck.
For some people, the time period between Jan. 1 and April 15 can be very stressful. What if I make a mistake and have to pay? What if I miss an opportunity to get money back?
The concerns running through a person’s mind trying to file their own tax return are endless. But for some people, paying a professional to prepare and file their taxes simply isn’t an option.
Fortunately, an alternative exists.
AARP Tax-Aide, the nation’s largest volunteer-run tax counseling and preparation service, offers free services to seniors and low- to moderate-income taxpayers in Jefferson and Clallam counties. While the organization focuses on people 60 and older, all ages are welcome.
Volunteers are trained to complete 1040-EZ and 1040 forms and to deal with itemized deductions and the purchase and sale of homes and stock. They prepare and verify each return before electronically submitting the information to the Internal Revenue Service.
Kathy Schreiner, Tax-Aide communications coordinator for the North Olympic Peninsula, starting volunteering with the agency more than five years ago.
"My mother is 87 years old, and somebody has to help her with her taxes where she lives in Iowa," Schreiner said.
"I thought I would reciprocate and help somebody here."
Last year, Tax-Aide volunteers filed 2,166 returns in Clallam and Jefferson counties – a 42-percent increase over 2007. Of those returns, about 50 percent were joint filers, meaning that close to 3,000 people received help through Tax-Aide.
In addition to the usual forms and identification, taxpayers should bring evidence of the amount of real estate tax they paid in 2008, Schreiner said.
In general, homeowners can deduct property taxes and mortgage interest as an itemized deduction.
However, homeowners who don’t have enough itemized deductions to exceed their standard deduction are usually better off using their standard deduction because it will result in the lowest federal income tax.
This year, the Housing Assistance Tax Act allows home- owners to claim an additional standard deduction for property tax if the taxpayer does not itemize. The additional amount is up to $500 for individuals or $1,000 for joint filers.
"It reduces the amount of income you pay taxes on," Schreiner said.
"This is a huge benefit for seniors who own their own home."
Taxpayers also should know how much money they received for their stimulus payment earlier in the year, Schreiner said. Not because the money is being taxed, but because individuals and families who slipped through the cracks or didn’t receive all of their payment can do so now.
For example, if a couple welcomed a child in 2008, they may be eligible for an additional $300 rebate.
Another important tax credit is the Earned Income Tax Credit, a refundable income tax credit available to families with low to moderate earned incomes and to childless working people with very low wages.
People who qualify for the Earned Income Tax Credit pay less income tax, no tax or receive a tax refund. Even those who don’t owe income tax can get the credit.
An IRS study found that 26 percent of eligible recipients in Washington state didn’t file for the credit in 2007, adding up to more than $75 million unclaimed money, according to OlyCAP.
Many people who claim the Earned Income Tax Credit also qualify for the Child Tax Credit, worth up to $1,000 for each qualifying child 17 or younger.
Tax-Aide volunteers are trained to assist taxpayers with such issues.
Appointments aren’t necessary. Simply drop by and get help with your taxes.
Reach Ashley Miller at
ashleyo@sequimgazette.com.
Important documents to gather before filing a tax return:
__A copy of last year’s tax return
_ W-2 forms from each employer
_ Photo identification for self and dependents
_ Social Security cards
_ All 1099 forms showing interest and/or dividends as well as documentation showing the original purchase price of sold assets
_ An SSA-1099 if you received Social Security benefits
_ A 1099R if you received a pension or annuity
_ All forms indicating federal income tax paid
_ If applicable, unemployment compensation statements
_ Child care provider information (name, employer ID, Social Security number)
_ If itemizing deductions, bring all receipts or cancel ed checks for items such as medical expenses, taxes paid, mortgage interest paid and charitable contributions
_ Evidence of real estate tax paid in 2008
Tips to surviving tax season:
_ Even if it looks like you aren’t required to file, consider filing a federal income tax return. You may be owed a refund.
_ Gather records in advance and don’t forget to save a copy for your personal files.
_ Take your time. Rushing can lead to mistakes.
_ Double-check math and verify all Social Security numbers. Such errors are among the most common mistakes found on tax returns.
_ Get the fastest refund. Choosing direct deposit eliminates waiting for a check in the mail.
_ E-filing is easy. Completing tax returns online reduces mathematical mistakes and provides confirmation that your return has been received. E-file at www.irs.gov or www.icanfile.org, an IRS authorized site.
_ Avoid headaches: Prepare your taxes early.
_ Don’t panic. If faced with a problem or question, help is available online at www.irs.gov or by calling 800-829-1040.
Get help filing taxes in Sequim
Tax-Aide, a partnership between the AARP Foundation and the IRS, provides free tax preparation services and electronic filing to seniors and low to moderate-income individuals and families.
The Sequim site, located at the Sequim Senior Activity Center, 921 E. Hammond St., is open 12:30-4 p.m. Wednesday and 9 a.m.-3 p.m. Saturday through April 15. Additional sites are open in Port Angeles, Forks and Jefferson County.
For more information, call Kathy Schreiner, coordinator, at 681-3811.
