Tax season is here, along with the forehead-rubbing and hair-pulling frustration that comes with it. Consumers faced with myriad tax preparation options can save money with careful decision-making, says VeEtta Simmons, Crittenden County extension staff chair with the University of Arkansas Division of Agriculture.
Comparing rules and fees is the first place to start. Each tax preparation service charges a different amount, says Simmons. Consumers should check several places before selecting one. As it is in many cases, shopping around can save money.
It's also possible to avoid additional fees such as one for a refund anticipation loan, or RAL. "It's tempting to have the money in hand as soon as possible, but the fees charged for RALs often range from 50 to 500 percent of the amount of your loan," says Simmons. Other additional fees can be tacked on as well. Avoid using RALs if possible.
Another option is to file taxes electronically. "Some tax preparers may charge a fee to submit your tax forms electronically, but it's usually much less than the fees for a RAL," says Simmons. Be sure to ask the tax preparer about the cost.
Those who file electronically can get their refund in as little as 10 days.
In some cases, people may want to skip the cost of tax preparing companies and complete their own forms. Tax forms can be found online at the Internal Revenue Service (IRS) Web site. Forms and instructions are available at most libraries, too. It may take a few extra mouse clicks, but there's no service charge.
The IRS offers another option called Free File. This supports preparation of federal tax returns and no-cost electronic filing. Free File is usable by people with an adjusted gross income of $56,000 or less as of 2008. "The software has simple questions and automatically puts your answers on the right forms," says Simmons. More information on Free File is available on the IRS main Web site.
A list of other free tax preparation services follows below:
- VITA − Many people qualify for free tax preparation. The Volunteer Income Tax Assistance Program, or VITA, offers free tax preparation. VITA is available for people who make around $42,000 or less. Electronic filing is usually available. VITA sites near you may be located by calling 1-800-829-1040.
- TCE and AARP − People aged 60 and older can find free tax assistance through Tax Counseling for the Elderly, or TCE. Trained volunteers provide tax counseling and basic tax preparation. AARP offers a free TAX-Aide program. Call 1-800-829-1040 for TCE information. For AARP Tax-Aide, call 1-888-227-7669.
- AFTC − The Armed Forces Tax Council, AFTC, oversees free tax assistance programs for the Army, Navy, Air Force, Marine Corps, and Coast Guard. Military members and their families can receive free tax preparation assistance. Electronic filing is usually available. Tax preparation sites are usually set up within military installations, so contact them for more information.
These options can help reduce the stress of tax time and help consumers make wise, money-saving choices. This keeps money in consumers' pockets when they need it most.
For more information on tax preparation and assistance, talk with your county Extension agent or visit the Cooperative Extension Service web site. The Cooperative Extension Service is a part of the University of Arkansas Division of Agriculture.
