Tax time brings hopes of refunds
Published 11:32 pm Monday, January 16, 2012
There is almost a clear divide in the income tax world between those who are expecting a refund and those who expect to be paying the government.
“At this time of the year, most of the customers coming in are getting refunds,” said Ed Huite, a Jackson Hewitt owner in Alabama. “From mid-February through the end of the season, it goes the other way.”
Jackson Hewitt is on outlet where Alabama residents can have their taxes prepared for free, if they only need a simple return. There is an office already in place in the Troy Walmart to help customers in Pike County.
The government also offers freefile at the irs.gov website.
“Obviously, the sooner you start planning to file your taxes, the better,” said W. Ross Jinright, CPA with Gibson & Carden in Troy. “Typically what we tell people is that the beginning of February is a good goal.”
That way, Jinright said, people have time to receive all paperwork from employers and other tax information needed to file an accurate return.
And even if you aren’t looking forward to a refund, you shouldn’t procrastinate and prolong the filing process.
“The best thing to do is go ahead and file a tax return, even if you can’t pay the bill,” Huite said. “You avoid penalties by filing. If we go ahead and file electronically, you still have until April 17 to come up with the money.”
There are also options to pay your bill in installments, if it turns out you owe the government.
Jinright also suggests taking a look at your income tax withholdings if paying taxes is a common occurrence.
“If you know you owe every year, you probably need to increase your withholdings,” Jinright explained. “Although you will have less money each pay period, you’ll have less or nothing to pay during tax season.”
And don’t forget possible tax credits and deductions. Some of the most popular claims are charitable contributions, mortgage interest and higher education costs and fees. Although online programs are widely available to assist people in filing their taxes for free or little expense, ever-changing tax laws can be confusing. “Take it to a professional if it is more complicated than you want to deal with,” Jinright said. “That’s what we are here for.”