Tax Tips for 2007
Keep Your Tax Refund. Don't Give It Away!
Lots of money flows at tax time. And everyone wants a piece of it. Be smart
and keep your hard-earned refund. Here are our simple tips for how to hold onto
your money.
CONTENTS
Tip #1: Don't pay for a "rapid refund," "HELP" or "Money Now" loan.
Tip #2: Find free tax filing assistance in your area.
Tip #3: Or file for free online.
Tip # 4: File for all of the tax credits you qualify to receive.
| Tip #1: Don't pay for a "rapid refund." |
Many commercial tax preparers love to sell "rapid refunds." Don't
bite!
Some tax preparers are now offering the
Holiday Express Loan Program or "HELP" during December and "Money Now" loans
during January. Again, these are risky, extremely high interest loans. Just say no!
Read more
|
These are really high-interest short-term loans with outrageouly high interest
rates - ranging from 40% to over 700% APR. Worse yet, as electronic
filing becomes more common, these offers don't deliver your refund that much faster. Typically,
they will speed up your refund by only a week or two, depending on
your situation.
If you fall for these schemes, you
are putting money from your refund into the pockets of a bank and a tax preparation company.
Keep all of your hard-earned
money and tax credits for yourself and your family. You deserve it! Say no to all forms of up-front
tax refund offers.
According to the Center for Responsible Lending,
a 2005 study found that tax
preparers and lenders stripped about $1.57 billion in fees each year
from the earned-income tax credits paid to working parents. If you don't want
to be a part of this sad statistic, just say no.
| Tip #2: Look for free tax filing assistance in your area. |
Qualified volunteers offer free tax filing help to low-income Mainers.
Check out these free tax help programs:
| Read about how an Augusta couple could have saved $210 by using free tax services.
Morning Sentinel
|
VITA and AARP Tax-Aide services have better error rates (make fewer mistakes)
than many commercial tax preparers. Many sites offer free e-filing, some offer
shut-in services, and a few offer help in languages other than English.
More regional tax help coalitions are opening this year. They offer both free tax assistance and
help with building assets from the credits you've claimed:
- CA$H: Creating Assets, Savings and Hope (serving the greater Portland area)
Call: 874-1000 ext. 330
-
Lewiston-Auburn Tax Credit Awareness Coalition (LATCAC)
Call: 784-2951 ext. 109
- Penquis Community Action (serving Bangor and Dover-Foxcroft areas)
Call: 973-3612
- Sagadahoc County Weed and Seed VITA Coalition
Call: 373-1140 ext. 24
- York County CA$H Campaign
Call: 324-5762 ext. 2903 or 1-800-965-5762
- Calais VITA Program
Call: 454-0900 or 454-3200
The IRS provides
Taxpayer Assistance Centers at a few locations. There
a five in Maine: Augusta, Bangor, Lewiston, Presque Isle, and South Portland.
| Tip #3: If you feel comfortable with using a computer and have internet
access, file for free online. |
If your total household income is less than $50,000 and you don't itemize your deductions,
try Pine Tree Legal's free I-CAN!™
online software. As of April 10, 2007, taxpayers nationwide have received over
$14,000,000 in federal tax refunds using this free I-CAN program! It's simple and it's free. Try it.
|
The IRS has announced that tax preparers who are offering Free File through the IRS this year
have agreed not to sell "rapid refund" loans. However, they may still charge you to file your state
tax return. So keep in mind that you can also use
Maine's free I-file,
to avoid this expense.
Read more. |
Or visit the IRS site for links
to other free online filing options. Each provider sets its own
eligibility rules for its free filing program, so it's worth exploring several
sites to see if you qualify. (If you use one of these sites, be careful about
pop-up ads and add-on fees. Remember: Just say no.)
The State of Maine has a direct
on-line "I-file" program for state income tax returns.
Attention Non-resident Aliens: Check out the
Guide
for Nonresident Aliens Preparing Federal Income Tax Returns posted
by the International Office of the University of Texas at Austin:
According to the site, this Guide will help you to:
- Determine if you are required to file a tax return;
- Determine which form or forms you should file;
- Understand the filing instructions; and
- Prepare and submit your own federal tax forms.
| Tip # 4: File for all of the tax credits you qualify to receive. |
These three credits can be especially valuable to low-income taxpayers:
- Earned Income Credit (EIC)
The Earned Income Credit (EIC) for low-income taxpayers keeps growing. For
tax year 2006, the maximum credit for a household with two or more children
is $4,536. That can be money in your pocket! The IRS has reported that an
estimated 4.3-million taxpayers are leaving about $3-billion unclaimed. So don't
forget to claim this credit if you are eligible.
Read more
- Child Tax Credit
This is a partially refundable credit worth up to $1000 for each child
up to age 17. Read more
- Child and Dependent Care Tax Credit
This credit is offered by both the state and federal governments. It is worth only a portion of your total
child care costs, and there are caps. But the state credit is "refundable," meaning that you can claim it
(up to $500) even if you pay little or no tax.
More on Federal Child and
Dependent Care Credit
More on Maine Dependent Care Tax Credit
For 2007 only, you may be eligible
for a Long-distance Telephone Tax Refund of $30 to $60. This one-time refund will go out to tax filers
who had long-distance service anytime after February 28, 2003 and before August 1, 2006.
Read more
If you are interested in helping to spread the word about tax credits for low-income people and free tax
help, or just want to know more about these topics, go to the Center for Budget and Policy
Priorities page: Make Tax Time Pay
More Resources from the IRS
1040 Central
IRS page for individuals, designed "to make the agency’s Web site an even easier-to-use source of
information."
Free Tax Help Available
This IRS press release outlines free tax help programs offered by the IRS and others.
Choosing a Tax Return Preparer
IRS Tips for finding a reputable tax preparer, and avoiding the bad ones.
|
Notice
Prepared by Pine Tree
Legal Assistance
January 2007
Sometimes the laws
change. We cannot promise that this information is always
up-to-date and correct. If the date above is not this year,
call us to see if there is an update.
We provide this
information as a public service. It is not legal advice.
By sending you this information, we are not acting as your lawyer.
Always consult a lawyer, if you can, before taking legal action.
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