CARL WATTS & ASSOCIATES

August 12, 2013

www.carlwatts.com
office@carlwatts.com
Washington DC
 tel/fax 202 350-9002
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Yes, it is true, you do have the option of letting the IRS figure your tax and certain tax credits but only if you qualify and so choose.

This option is available even if you are not required to file a tax return but would like to request a refund of taxes paid or would like to claim certain tax credits, such as the earned income credit or the tax credit for the elderly or the disabled.

To qualify for this free of charge service, you must meet the following criteria:

  • You have a taxable income of less than $100,000;

  • You receive income only from the following sources: wages, salaries, and tips; interest and dividends; taxable social security benefits; unemployment compensation; IRA distributions; pensions and annuities;

  • You do not choose direct deposit as a method of refund receipt;

  • You do not want any part of your refund applied to estimated taxes;

  • You do not itemize your deductions on Schedule A;

  • You do not file certain forms (e.g. forms for foreign earned income, AMT, nondeductible IRAs, child investment income, qualified adoption expenses, tax on lump sum distributions, Archer MSAs, HSAs, and a few other less usual forms).


To put the IRS to work making your tax computations, you do have to get them your return by April 15.

You have to file either Form 1040EZ, Form 1040A, or Form 1040, with the following information:


  • Name, address and social security number for you and your spouse, if applicable;


  • Complete information about your income from the sources mentioned above, on the income line items as they apply to you;


  • Enter your federal income tax withheld from forms W-2, box 2 or 1099, box 4 on the applicable for federal income tax withheld;

  • Enter any estimated tax payments;

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  • Mention on the appropriate lines any tax credits you may claim (Credit for the Elderly and Disabled, Earned Income Credit);

  • If you claim the Credit for child and dependent care expenses, complete Form 2441, Child and Dependent Care Expenses, and attach it to your return; enter the amount of the credit on line 29. The IRS will not figure this credit;

  • Attach your Forms W-2 and 1099s that show federal income tax withheld;

  • Sign, date your return, and enter your occupation. If a joint return, both spouses must sign. Enter your daytime phone number to allow IRS to contact you if needed.

For detailed instructions on what lines and forms you need to fill out, please go the the following link to the IRS webpage.

The return must be mailed to the Service Center that services the area in which you live.


After the IRS figures your tax, you will be issued either a refund if you overpaid your tax or a bill if you underpaid your tax. If you receive a bill, you can avoid interest and late-payment penalties if you pay the amount due within 30 days of the date of the bill or before the due date of the return, whichever is later. Note, however, that you may be charged a penalty for underpayment of estimated tax if applicable.

As stated in the beginning, this is just an option for taxpayers who have a less complicated tax situation and don’t wish to pay for income tax software or enroll any tax professionals.


If you choose this option, you will still have to fill out all required and pertinent information and double check to make sure it is correct. It requires a lot of your precious time and will probably delay the payment of any refund you are entitled to.


Of course, you will also need to figure out and file your state income tax as well.

Although it is a good thing to know all the options available for you, please make sure you choose the option that can best suit your situation and represent your interests.