During the past few weeks, anyone who held a job in 2006 has received that dreaded document in the mail: the W-2 tax form.
With just more than two months until Tax Day, which falls this year on April 17, many students and community members may not realize there are a plethora of inexpensive, or often free, options to get taxes out of the way or get refunds in their pockets.
Saturday at the University the Beta Alpha Phi business fraternity and the School of Law will begin their Volunteer Income Tax Assistance Program. Staffed by students trained and certified by the Internal Revenue Service, the program offers free tax advice and filing help to members of the community.
Beta Alpha Phi President Jon Campo said the group also brings in tax professionals each weekend for more difficult problems. Last year the program filed approximately 150 tax returns.
“We were the biggest (VITA) program in Oregon and we triple the number of taxes we filed last year,” Campo said.
The sessions are held every Saturday in 455 Lillis with cases accepted between noon and 5 p.m. After a two week break during Spring Break the VITA program will hold two more sessions on April 7 and 14.
“We try to help out mostly low-income taxpayers, but the higher and higher your income goes the more difficult it becomes,” Campo said.
University sophomore Kate Okrasinski, who worked at a boating center in Seattle last summer, said she will be completing her own taxes for the first time this year under “close supervision” from her mother.
“My mother does it for the entire family, so she will be on the phone if I get around to doing it,” she said.
Though Okrasinski admitted she knew nothing about filling out tax forms, the process will be a good learning experience, she said.
“I figure the anticipation of it is the worst part,” Okrasinski said. “I’ve just got to sit down and do it, and I’ll figure it out.”
University senior Travis Roderick, by contrast, is no stranger to the annual ordeal. As someone who has owned and operated two different businesses, Roderick’s tax forms are slightly more difficult than those of the average taxpayer.
“Once you get into the business side of things, it gets a little more complex,” he said.
To make it easier, Roderick uses Tax Cut, an electronic tax service program through H&R Block that takes income and tax information from W-2 forms and uses it to automatically print out completed tax forms to be mailed in by April 15.
For taxpayers like Roderick, who chose to do their own taxes, there is also the option to e-file instead of mail their returns. The secure electronic transmission processing of tax returns speeds up the process and provides a confirmation from the IRS.
It also has some significant benefits for taxpayers expecting refunds, Campo said.
“You get your refunds faster, and if you realize you make a mistake you can re-file,” he said.
In addition to purchasing boxes of tax software a newer option is gaining popularity with taxpayers.
The IRS allows workers who made $52,000 or less in 2006 to e-file their federal tax returns for free through private online tax preparation companies like H&R Block’s TaxCut Free File or Turbo Tax Freedom Edition.
These free Web sites emulate the approach of boxed software, giving users passwords and logins instead of disks. The Free File program, started in 2003, is appropriate for an estimated 70 percent of all taxpayers, according to the IRS.
Roderick said he decided to complete his taxes both by hand and through Tax Cut last year and compare the difference. Because of various oversights on his hard-copy forms, the automatic tax program earned him an extra $100 on his return, Roderick said.
Political Science major Dan Snyder has been using the Free File service for the past three years. Although his federal return is always free he did get charged less than $5 to file his state taxes too.
“I filed as soon as I had all my tax information,” he said. That was two weeks ago and he already has his state refund and expects his federal refund to be direct deposited by the end of the week.
“If you’re not going to be doing itemized deductions … it’s so easy,” Snyder said. “You can create a PIN number. You don’t even have to mail in your signature anymore.”
Despite technological advances, there are still pitfalls, and students should be sure to consult with parents or financial advisors before jumping into the process.
Students living and working in multiple states should take care when filing their taxes, Campo said.
“It’s a little bit more complicated in that case,” he said. “We’ve gotten pretty good at states like California and on the western states, but if (taxpayers) know that their states have complex tax laws we still encourage everyone to come out and file with us.”
Don’t panic
When to file: Taxes for individual filers are due Tuesday, April 17, 2007.
IRS and state e-file: Filing and paying your taxes electronically usually means receiving a tax refund faster (an estimated 8-15 days assuming the tax return contains no errors). It saves you the trip to the post office, the cost of postage and also ensures that taxes are filed on time.
IRS Free File: Taxpayers who made $52,000 or less in 2006 can e-file their federal tax returns for free through private online tax preparation companies. An estimated 70 percent of all taxpayers are eligible.
How: Go to www.irs.gov and click the “Free File” link to find a private online preparation service that won’t charge for federal returns.
Volunteer Income Tax Assistance Program: A national volunteer program staffed at the University by IRS-trained and certified students that offers free tax advice and filing in conjunction with the Beta Alpha Phi business fraternity and the University’s School of Law.
How: Sessions are held every Saturday in 455 Lillis with cases accepted between noon and 5 p.m. After a two week break during Spring Break the VITA program will hold two more sessions on April 7 and 14.
Need more time: If you want an automatic 6-month extension to file your federal return, file Form 4868 (Application for Automatic Extension of Time To File U.S. Individual Income Tax Return). You can also get an extension by phone or via the Internet. Then, file your taxes by Oct. 15.