By Timothy Cox
The Statehouse File
INDIANAPOLIS — Hoosiers have until midnight Tuesday to mail or electronically submit their income tax returns – and most will have a refund waiting for them.
About two-thirds of Americans wait until the last three weeks of the tax season to file their returns, according to the Internal Revenue Service, which collects and process federal payments.
“The assumption people make is that the majority of them are people who owe,” said Luis Garcia, an IRS spokesman for Indiana. “That’s not the case. The majority of them are getting money back.”
In fact, 83 percent of all Hoosiers get a refund, Garcia said. “If they’re not filing, they’re probably just leaving money on the table,” he said.
Plus, the IRS penalty for not filing is 10 times greater than the penalty for not paying. So, Garcia says, even taxpayers who owe money will benefit from filing.
This year’s deadline for state and federal taxes is April 17 – two days later than normal.
Typically, state and federal returns are due April 15. But this year’s deadline was extended because April 15 is a Sunday and April 16 is a holiday recognized by the District of Columbia.
And if you’re still waiting to file, there’s some good news: Most Hoosiers can submit their returns at no cost.
The Indiana Department of Revenue and the IRS offer FreeFile, which allows taxpayers who make $57,000 or less to file at no cost using one of several tax software providers including H&R Block and TurboTax.
Indiana officials have estimated as many as 1 million Hoosier taxpayers will qualify to use the FreeFile service. Garcia says that’s nearly 70 percent of Indiana returns.
“It is still open and ready to have people take advantage of it and use that software and file,” Garcia said.
Taxpayers with an income greater than $57,000 can still file their federal returns for free using Free Fillable Forms, but this option does not include a step-by-step guide and requires taxpayers to know how to file their taxes long-form.
The IRS is offering other ways to help as well Hoosiers as well.
Indiana residents who were unemployed for two or more weeks during 2011 or are in other financial problems can benefit from the agency’s Fresh Start Initiative.
Fresh Start “is a program that helps people who are experiencing financial difficulties or hard times and are unable to meet their tax obligations,” Garcia said.
The program offers multiple ways to relieve taxpayer stress including extending the deadline for paying tax debt by six months and accepting smaller payments until a tax bill is paid off. A third option is the “Offer in Compromise” program.
“Offer in Compromise” allows taxpayers to settle a debt with the IRS for less than what the payer owes. Garcia says this option is especially attractive to small business owners.
The IRS “will waive the total amount and bring in a reasonable payment plan to help you get rid of the debt,” Garcia said.
Tax Counseling for the Elderly is a free tax return option for senior citizens through an IRS partnership with the AARP and other organizations.
Tax forms and more information about tax programs is available at www.IRS.gov. Information about Indiana tax returns and programs is available at www.ai.org/dor/.
Timothy Cox is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.