RISMEDIA, March 16, 2009-(MCT)-With a looming tax day comes some last-minute advice and information from the experts.
Due to budget cuts, the state can’t hire the usual number of temporary employees who open the mail and help process paper returns, so Comptroller Peter Franchot is encouraging Marylanders to file electronically.
Filing electronically not only speeds up refunds, it also saves the state about $1.50 per return, “and that adds up when you’re talking about over 2.5 million returns,” Franchot said.
The comptroller’s office is seeing people waiting until the last moment to file, particularly if they owe the state.
“However, if they go to our website and use our I-file Online system, they can schedule their payments for as late as April 30, another reason to file Online, even if you owe money,” Franchot stated in an e-mail.
As for payments from the stimulus package, known as Economic Recovery and Reinvestment Act of 2009, no checks will be mailed to people as they were last year, Franchot said.
“This year, people will notice the tax changes in their paychecks starting April 1,” he said. “Businesses can compete for state contracts that are being funded with federal stimulus funds, but they would have to go through the normal procurement process at the various state agencies.”
The 2008 stimulus payments are not taxable. However, taxpayers must report the amount they received to assure they are not entitled to additional credit for changes in marital status or exemptions occurring in 2008, said William J. Whitten, owner of Whitten Tax & Financial Services LLC in Frederick, Maryland.
Other components of the 2009 stimulus package that affect individuals include a one-time payment to retirees, disabled individuals and Supplemental Security Income recipients receiving benefits from the Social Security Administration; disabled veterans receiving benefits from the Department of Veterans Affairs and Railroad Retirement beneficiaries and a deduction for state and local sales and excise taxes paid on buying new cars, light trucks, motor homes and motorcycles bought after Feb. 17, 2009 and before Dec. 31, 2009.
The tax is applicable up to $49,500 of the purchase price of the vehicle and is phased out for joint filers with Adjusted Gross Income between $250,000 and $260,000 and others with AGI between $125,000 and $135,000.
Whitten Tax & Financial Services LLC has had more early filers than last year and the company is beginning to receive more returns from clients who had stock trades last year.
“That’s probably because of the economic crisis and also the two additional weeks allowed brokers to provide 1099s,” Whitten said. “Our returns continue to be more difficult each year, involving investment reporting, dependent and marital changes and application of credits.”
Whitten had several clients receiving the $7,500 first-time homebuyers credit and others wishing they had waited until Jan. 1 and not have to repay the credit, he said.
The stimulus act expanded the first-time homebuyers credit to $8,000 and does not require repayment, Whitten said.
In the event taxpayers can’t file their taxes before April 15, they should file an extension to prevent a possible penalty for failure to file. Any taxes owed should be paid with the request for extension to prevent late filing and interest penalties. Those receiving large refunds or who owe taxes should adjust their withholding amounts or estimated taxes now for better tax planning and use of their money, Whitten said.
Asked for last-minute advice, Don Linton, a principal of Linton Shaffer Warfied & Garrett certified public accountants and business consultants, said, “Everyone should take two aspirins and pray a lot. No one I talk to thinks we have hit bottom yet.”
Copyright © 2009, The Frederick News-Post, Md.
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