What you need to know about your 2011 tax return

By Andrew Neff, BDN Staff
Posted Feb. 01, 2012, at 7:44 p.m.

BANGOR, Maine — The Internal Revenue Service has some good news for taxpayers this year — especially for those who procrastinate.

“This year we don’t see a lot of tax changes,” said Peggy Riley, an IRS spokeswoman. “But at least one good one is because April 15 falls on a Sunday, and April 16 happens to be Emancipation Day in the District of Columbia and Patriot’s Day in Maine and Massachusetts, people have two extra days to file this year.”

There are some other potentially beneficial changes.

“There is a new form, the 8949, to report your capital gains and losses,” Riley said.

What may be of more interest to taxpayers are things that haven’t changed — but might in coming months.

“We did have that payroll tax deduction extended for two months through January and February. Right now we’re seeing more in our paychecks, but that could change come March if they don’t extend it,” Riley said, referring to Congress. “And there are a bunch of benefits that are set to expire unless they’re extended.”

Those benefits, still available to qualifying taxpayers filing their 2011 returns, include the American Opportunity Credit for people enrolling in higher education, the Enhanced Child Tax Credit, and the Expanded Earned-Income Tax Credit for people with three or more children.

“There are also some energy credits for people looking to make energy improvements to their homes set to expire after this return period,” Riley said in an interview. “And we’re promoting a health insurance deduction for small businesses that offer a plan to their employees and help pay for it.”

Riley also stressed the value of the Earned Income Tax Credit, calling it the most underused credit. It’s available to Americans who earned $49,078 or less last year. The income figure and credit are geared to their filing status and whether they have children.

“That’s the biggest one because they think it’s not for them, they don’t know about it, or they haven’t heard about it,” she said, “It’s a fluid amount of people who qualify for it each year.

“It’s a credit for only working people, so you have to have some income, and that’s an incentive to get people back into the work force and do better for themselves.”

Another lesser-known credit — the child and dependent care credit — will be of particular interest to parents.

“It’s a credit for parents who are paying someone to watch their children while they’re working,” Riley explained. “Even summer camps and programs, as long as they’re not overnight, can qualify as well.”

Once the entire amount paid for child care is determined, parents can be reimbursed a percentage.

Riley wants to further promote the fact that the IRS is available for help with filing and other tax-related issues — in person, by telephone or online.

The IRS Volunteer Income Tax Assistance program offers free tax help to anyone earning $50,000 or less while its Tax Counseling for the Elderly Program offers free tax help to anyone age 60 or older. More information can be found at www.IRS.gov, and people can call the IRS at 800-906-9887 to find the nearest Volunteer Income Tax Assistance site.

“We’ve also had the free file program for a number of years,” Riley added. “We have a list of 20 companies in partnership with us that offer free electronic filing for people earning $57,000 a year or less.”

More information is available online at www.irs.gov/freefile.

Riley also cautioned taxpayers against scams and identity theft schemes that always pop up at this time of year.

“We do see a lot of tax-related scams, especially when it comes to identity theft,” she said. “Most of them are made to look official regarding refunds rather than people owing the IRS money because people are more apt to respond to a potential refund. They’ll typically ask for [personal identification] numbers or credit card numbers or Social Security numbers, things the IRS doesn’t normally ask for.”

Anyone with questions or concerns about potential fraud or scams is urged to call 800-908-4490.

http://bangordailynews.com/2012/02/01/news/state/what-you-need-to-know-about-your-2012-tax-return/ printed on September 22, 2014