taxes

Let the IRS figure your tax

Friday Jan. 29, 2010
Posted 11 a.m. EDT

I'm old enough to remember when doing your taxes meant pencils, erasers and a calculator or adding machine. Thank goodness for tax software!

Nowadays, most of us use our computers to fill out our tax forms and zip them off to the IRS.

But not everybody has become a computer tax convert. Last year, according to IRS data, around 47 million folks sent their tax paperwork in the old-fashioned way, via the U.S. Postal Service.

Now I'm sure that quite a few of those folks used tax preparation software to fill out all their forms, but opted to use snail mail instead of hitting the "enter" button on their keyboards. Hey, I've done that, usually in years when I owed the IRS and didn't want to pay a processing fee to put my tax bill on a credit card. Instead, I wrote a check, put a couple of stamps on the envelope and dropped the packet off at my local post office.

Folks who use software but claim the first-time homebuyer credit are going to have to go back to the printed-and-mail method this filing season. This tax credit was tweaked yet again last year and now demands home purchase documentation be attached to your filing. And that means you have to revert to old-fashioned snail mail.

But what about folks who don't use tax software at all? Even in this increasingly wired world, there are a few of them. I even know an accountant in New Jersey who still does his and all his clients' returns by hand.

How the heck does he and others with the same mindset manage to sort through all the work sheets and various tax break eligibility issues without ending up bald from pulling their own hair out?

Maybe they get by in some instances by letting the IRS do some of the tax work for them.

Yep, the IRS will actually figure the amount of tax you owe, as wall as some credits -- the credit for the elderly or the disabled, the Earned Income Tax Credit, or EITC, and the Making Work Pay credit -- that you might be able to claim, for you.

No, you don't ship off your shoebox of receipts and W-2s and 1099s to Uncle Sam. You'll still have to fill out most of the lines on your tax return, be it a 1040EZ, 1040A or 1040. But when it comes to doing most of the computations, the IRS will take care of the rest.

Kind of quaint, don't you think?

I've got a call into the IRS as to how many folks actually avail themselves of this option. Since the Washington, D.C., office didn't immediately get back to me, I suspect the figure is quite low and perhaps not even tracked at all. When I do get the data, I'll let you know.

Just in case you might want to put the IRS to additional work this filing season, I thought I'd pass along this info.

For a preview of this added IRS service, check out the agency's TeleTax Topic number 552 by calling (800) 829-4477. If you prefer print, details, along with the limitations on this offer, are available in IRS Publication 967.

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