Tips for last-minute tax filers

USA Today

The annual tax filing deadline looms Monday at midnight, and an estimated 26 million Americans, 20 percent of filers, will be scrambling to beat it, the Internal Revenue Service estimates.

For those who haven't given a minute's thought to their taxes, the good news is that changes in the law from last year are minimal. But there a few to be aware of:

• The maximum amount of deductible interest on a student loan was raised to $2,000.

• Form 1040 includes a new check box allowing you to give the IRS permission to contact your tax preparer directly to discuss a return.

• The IRS has reorganized its service centers, so check the instruction booklet to make sure you're mailing it to the right place.

Where to find more tax help Help is available for those planning to pay their taxes by Monday. • IRS' 24-hour toll-free help line is 800-829-1040. • Recorded information on scores of tax topics is available toll-free at 800-829-4477. • In addition to regular weekday hours, many local IRS offices will be open tomorrow from 8:30 a.m. to 12:30 p.m. • Help is available on the Web: Federation of Tax Administrators, www.taxadmin.org Microsoft Money Central, moneycentral.msn.com Intuit's Quicken, www.quicken.com Gary Klott's Tax Planet, www.taxplanet.com

The dot-com meltdown is adding confusion over the alternative minimum tax. And H&R Block, the largest tax preparer, reports that what befuddled taxpayers in years past continues to do so this tax season.

In its annual informal survey of field representatives, H&R Block said the most confusing tax issue for clients is the same as last year — Schedule D, the IRS form for calculating and reporting capital gains and losses.

Other issues prompting lots of queries from clients are the Earned Income Credit, the marriage penalty and the various higher education incentives.

It's up to you to make sure the right boxes are checked and your arithmetic is correct on Form 1040. But here is information that should be helpful as you attempt to get your 2000 tax return filed on time.

The deadline for almost everyone is midnight Monday, because the traditional deadline, April 15, falls on a Sunday.

Options for paying

Of course, the IRS will accept your personal check payable to the United States Treasury. And e-filers may authorize a debit from their bank account. You can pay with a credit card, but you'll have to pay a "convenience fee" to do so. IRS authorizes two companies to accept credit card payments on its behalf. They charge a fee of about $25 for each $1,000 owed to the government. Find Official Payments Corp. at 1-800-272-9829 or www.officialpayments.com. Find PhoneCharge at 1-888-255-8299 or www.about1888alltaxx.com.

Having the IRS finance your tax debt over time is a possibility. You can request it by filing Form 9465, "Installment Agreement Request."

You're guaranteed approval if the amount is less than $10,000, the proposed repayment period is less than three years, you're up-to-date on taxes for previous years, and you can show that you can't afford to pay your 2000 taxes when due. An installment payment calculator is available on the "More Info for You" page at www.irs.gov.

Filing for extensions

Everyone is entitled to a no-questions-asked four-month extension of the filing deadline, and the IRS is expecting 8 million taxpayers to seek just that this year.

But an extension of the deadline does not allow delayed payment of what you owe. If you take the extension and it turns out you haven't paid enough before the April deadline, you'll owe a late payment penalty plus 8 percent interest.

You'll have to notify the IRS, before the Monday deadline, of your need for an extension. Here's how:

• Mail IRS Form 4868, "Application for Extension of Time to File U.S. Individual Tax Return."

• Call the IRS toll-free at 888-796-1074. Have Form 4868 handy as a worksheet. Also have your 1999 return; some figures from it will be needed to verify your identity. The IRS will provide a confirmation number, so you'll have proof of the call. You'll also be given the option of authorizing a debit from your bank account.

TurboTax and TaxCut, the most popular preparation programs, won't e-file an extension, but they will allow you to print out a form for mailing. E1040.com and FileYourTaxes.com permit e-filing of Form 4868. If using a Web-based tax program (as opposed to desktop software), expect to pay a fee whether you print and mail the form or e-file.