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When doing your ’09 taxes, don’t overlook extra credits
State also telling residents to beware of ‘fast cash’ or ‘instant’ refunds
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By Elaine Morris Roberts,
Staff Writer
7:02 PM Saturday, February 6, 2010
Everyone with a job should have received an official W-2 form from employers by Feb. 1, which means it’s time to get serious about 2009 income tax preparation.
Whether taxpayers choose the traditional paper method, rely on computer software such as TurboTax, or schedule a meeting with a tax preparer, there are new deductions, refundable credits and other tax incentives to be aware of. Many result from the American Recovery and Reinvestment Act.
Unlike other charitable deductions, cash donations made in 2010 to fund relief efforts in Haiti are deductible on 2009 or 2010 federal tax returns, according to IRS spokesperson Jodie Reynolds.
Taxpayers must itemize deductions and no material contributions, such as clothing or food items, qualify.
To be sure a charity is recognized by the IRS, check the searchable database at irs.gov under “search for charities,” Reynolds said.
A long-standing, but often overlooked tax credit has been expanded for 2009. The Earned Income Tax Credit now covers up to three children and a wider range of incomes, Reynolds said.
The amount of an EITC is based on the amount of earned income and whether or not there are qualifying children in a household.
One in four eligible taxpayers is likely to miss out on the credit because they assume they don’t qualify, but the EITC can be worth up to $5,657 to qualifying taxpayers, Reynolds said.
Homeowners should be sure to take advantage of applicable mortgage interest deductions, first time home buyer’s credit and energy-efficiency credits. The home buyer’s credit has been expanded to include first-time buyers and those who purchase a new home, but have owned and lived in another primary residence for at least five of the last eight years, said Laura Haber, senior tax adviser with HR Block.
Energy efficiency credits may apply for upgrades such as new windows, additional insulation and Energy Star rated appliances.
Other expanded credits include the American Opportunity Credit, which allows deductions for various college expenses. This year, textbooks and some computer equipment qualify.
The Making Work Pay Credit, which many taxpayers have already received in the form of a lower payroll deduction, will appear as an added line on IRS forms this year. A Schedule M form is also required for those filing Form 1040 or 1040A to determine whether taxpayers have already received the full credit or are due more money, Reynolds said.
Details about all tax credits can be found at irs.gov.
Getting things filed
This year, nearly every taxpayer has the opportunity to access free filing services with many qualifying for free preparation services.
Taxpayers with an adjusted gross income of $57,000 or less have free tax preparation options.
The state of Ohio’s Benefit Bank offers free tax prep locally through Catholic Charities, which serves Clark, Champaign and Logan counties.
The OBB is a Web-based computer program which can provide various services, including tax services and public benefits, to low and moderate-income Ohio residents.
To utilize OBB, individuals need to have 2008 W-2’s, Social Security numbers for all dependents and any other necessary documentation such as bank interest statements and receipts from charitable donations.
Appointments are required.
This is the third year for the service, which has become more popular each year, said Keith Williamson, regional director at Catholic Charities.
“We’ve seen a substantial increase every year, and this year’s participants have largely been people who utilized the service last year. ... We’ve added staff to increase the number of returns we will be able to prepare. All of our preparers are trained by the state on the Benefit Bank program,” he said.
The volunteers at Catholic Charities can file any type of tax return; returns can be filed electronically or printed out to be mailed. Benefit Bank volunteer can also review last year’s return for errors or missed deductions.
“We’ve gotten some pretty sizeable refunds for people, even up to $10,000. We make sure to look at the EITC and other deductions they might not know about,” he said.
The Internal Revenue Service offers Free File, a partnership with Free File Alliance LLC, which provides income tax preparation and electronic filing for taxpayers with an AGI of $57,000 or less.
The program offers 20 different software options; there is a list of Web sites that offer Free File services at irs.gov.
According to irs.gov, about 70 percent of all taxpayers can take advantage of the Free File program.
For taxpayers with an AGI over the $57,000 limit, the IRS offers Free File Fillable Forms. The fillable forms program allow taxpayers to fill out and file tax forms electronically.
Active duty military personnel can take advantage of Operation CPA, a partnership with the Ohio Society of CPAs and the Ohio National Guard.
Operation CPA provides free tax preparation services to those who are permanent residents of Ohio and currently deployed outside of the state.
The service is available through April; information is available by calling (888) 959-1212 or via e-mail at cpanswers@ohio-cpa.com.
Tax filer beware
The state’s top lawyer is warning residents to be aware of scams found at tax preparation offices offering “fast cash refunds” or “instant refunds.”
Catholic Charities locations
Clark County: 701 E. Columbia St. 8 a.m. to 4:30 p.m., Monday through Friday (937) 325-8715
Champaign County: 122 Miami Street, Urbana, 8 a.m. to 4 p.m. Monday through Friday, (937) 652-2125
Logan County: 130 S. Main Street Court, Bellefontaine, 8 a.m. to 4:30 p.m. Monday through Friday, (937) 599-5595
To find an Operation CPA volunteer: Call (888) 959-1212 or e-mail cpanswers@ohio-cpa.com. Electronic request forms are available at ohioscpa.com
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