KINGMAN - With the U.S. mired in the worst economic downturn since the Great Depression, many Americans have lost their jobs, foreclosed on their homes or seen their retirement savings dwindle. And while many will breathe a sigh of relief when tax season officially ends at midnight tonight, many others will spend the preceding hours contemplating how much they owe - and how they're going to pay it.
But Phoenix-based IRS spokesman Bill Brunson says, even if you know you can't pay the full sum you owe, you should file your taxes anyway. It will save you from incurring a 5 percent penalty on whatever you do owe, and the Internal Revenue Service is willing to work with you on the rest.
"You want to go ahead and file the return so that it's complete," Brunson said. "Pay what you can, and then there will be an official billing so that the taxpayer knows exactly what they owe, and they can approach the IRS and work out a pay arrangement."
Failing to pay the full amount you owe by the April 15 deadline will also incur a penalty of half a percent, but it's much more manageable than the penalty for not filing at all. If you still haven't figured out how much you owe, you can also file for an extension, which gives you until Oct. 15 to file your 2008 return. Brunson said he expected nearly 10 million Americans to file for an extension this year, including 221,700 in Arizona.
"Either request the extension to file if you don't have everything together, or file on time - what you're doing is meeting your filing obligation," he said. "You still owe money, but we can work that out after the fact."
If you made less than $56,000 in gross income last year, you can file your taxes for free online by going to the IRS Web site, www.irs.gov, and clicking the "Free File" icon. From there, taxpayers can select from a list of online tax software that will walk them through the filing process, using simple questions to do the math and fill out the forms accordingly.
"We have an agreement with about 20 different (tax software) providers, and we've been doing this for about five years," Brunson said. "Over time, it's been refined and changed, and each year the item has had an increase in users."
New this year, the IRS site also offers fillable forms, a tool that allows taxpayers from any income bracket to select their federal tax forms and fill in the information online, then electronically sign and file the return, free of charge. The tool also provides a basic calculator and can be used to file for an extension as well, though it does not provide state tax forms.
Brunson noted that the IRS Web site has a special "What If?" section for people who are dealing with job losses, foreclosure or other circumstances that might affect their tax filing. From 7 a.m. to 10 p.m., local taxpayers can also call (800) 829-1040 to ask tax questions, talk about account issues or make payment arrangements.
"We can go through tax-law scenarios. They have manuals that have the telephone assister ask certain questions in a certain sequence to arrive at a correct answer," Brunson said.