It's Tax Time

By Laurel Kubin
Larimer County Extension Director

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As you finalize your 2009 income tax preparations, this is helpful information for yourself or others you know.

  1. Get free tax preparation if you are eligible. If you are age 59 or under with income up to $49,000, or are 60 years or older without a complex return, or have special needs, you may qualify for free tax assistance. Highly trained volunteers with the VITA (Volunteer Income Tax Assistance) program and the AARP Tax-Aide program will help you prepare your taxes. Call 2-1-1 to learn the 2010 site schedule. Or if you have access to the internet use this link to search for Volunteer Income Tax Assistance (VITA) and AARP tax sites by county for free tax preparation: http://www.coloradovita.org/
  2. Apply for the Earned Income Tax Credit if you are eligible. Individuals who worked in 2009, full-time or part-time, may qualify. Even if you don't owe income tax you may qualify for a refund. Ask if you qualify for the Earned Income Credit and/or the Child Tax Credit.
  3. Avoid a refund anticipation loan. RALs are short-term cash advances against a customer's anticipated income tax refund. You may get your refund a little bit earlier, but you'll also get a lot less money. These loans are offered at very high interest rates, ranging from about 40% to over 700% APR. Also, they speed up the refund process by as little as only one week, compared to what consumers can expect by filing online and having their refunds deposited directly into their banking accounts. Beware of companies that call RALs a "refund" or "instant money". It's not - - it's a loan!
  4. Be cautious of car dealerships and furniture companies that offer to do your taxes so that you can use that money as a down payment. Usually there are processing fees and it is actually a loan. Also watch out for companies that charge extra for cashing your tax refund check.
  5. When you choose a tax preparer:
    • a. Select a tax preparer you can contact later in case the IRS has questions about your tax return.
    • b. Check out the tax preparer's reputation with others in the community. Check with the Better Business Bureau at www.bbb.org to see if any complaints have been filed.
    • c. Ask about fees before scheduling an appointment.
    • d. Do not sign a blank tax return or a return completed in pencil. Sign a tax return in pen, only after you've reviewed it. Check names, addresses, Social Security numbers and wage information for accuracy.
    • e. Check that the tax preparer signs the tax return in pen. His or her Employer Identification Number or Social Security Number are required on the return by federal law.
    • f. Request a copy of your completed tax return. Write down the preparer's phone number to call if your have additional questions about your tax return later.