Computer software changes by the IRS will cause refund delays for early tax filers.  According to the Internal Revenue Service, early tax filers can expect at least a one week delay in receiving their tax refunds this tax season.

The delay was caused by new safeguards installed in IRS computer systems to prevent refund fraud, IRS spokesman Michelle Eldridge says.  Taxpayers who filed their federal income tax return before January 26, 2012 can expect the delay in receiving their income tax return; those filing returns after January 27 will not be affected.

Even with the delay, taxpayers will still receive their refunds “in line with historic refund delivery times,” Eldridge says. Taxpayers who e-file their tax returns and arrange for direct deposit typically receive their refunds within 10 to 21 days.

The IRS provides a “Where’s My Refund” tool that provides an update on the status of taxpayers’ refunds, but the IRS notes that the dates are estimates and subject to revision. For that reason, taxpayers shouldn’t automatically assume they’ll receive their refunds on the projected date, says Judy Strauss , an enrolled agent in Cobleskill, NY.

sources: usatoday, irs.gov

The first thing you should do if you can’t pay your taxes is not to panic. If you can’t afford to pay the amount of taxes you owe, the best thing you can do is still file your tax return by the April 15 tax deadline and pay as much of your tax debt to avoid penalties and interest.

You should also contact the IRS to discuss your tax payment options. The IRS toll free number to discuss your tax debt payment options is 1-800-829-1040.

The IRS understands that many taxpayers are facing financial problems due to unemployment and the rise in prices for services and basic necessities, but you should still file by the tax deadline. In fact, the Internal Revenue Service may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. In some cases, the agency may be able to waive penalties. However, the agency is unable to waive interest charges which accrue on unpaid tax bills.

It’s a smart idea to learn about your tax debt payment options if you can’t pay your taxes.

source: irs.gov

Did you know that free online tax filing is available through the IRS website? Free File, available through the IRS, provides taxpayers the ability to prepare and e-file their federal taxes for free. Free File is managed and operated by a consortium of private tax preparation companies. Free File offers two free tax filing options: Free File Software or Free File Fillable Forms. More than 30,000,000 taxpayers have used this free tax filing online service since its inception in 2003.

Which Free Tax Filing Option Should I Use?
Lower-income taxpayers, those with Adjusted Gross Income (AGI) of $58,000 or less, can use the Free File Software option to use name-brand tax preparation software to prepare and file tax forms for free. The other Free File option, Free File Fillable Forms, is available to all taxpayers, including taxpayers whose incomes are greater than $58,000. Both tax filing options are free!

Can I file my State tax return using Free File?
Some states have formed their own agreement with some Free File Alliance members to provide free state tax filing, but they are separate from the national agreement.

Free state tax filing, using Free File, is available to taxpayers in the following states: Alabama, Arizona, Arkansas, Georgia, Idaho, Iowa, Kentucky, Michigan, Minnesota, Mississippi, Missouri, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Vermont, Virginia and West Virginia.

How do I use the free online tax filing service?
Free tax filing is easy, just follow these simple steps:

Prepare for your free federal tax filing
• Gather your tax information
• Determine your Adjusted Gross Income (AGI). Check your last year’s tax return for a quick estimate of your AGI.

Choose a Free File Option
• If your AGI is $58,000 or less, use Free File Tax Software from a Free File company or choose one of your own.
• If your AGI is greater than $58,000, use Free File Fillable Forms.

e-file your tax filing free
• e-file with Free File
• Use direct deposit to get your tax refund quickly and safely and to track the status of your tax refund.
• Pay electronically. Get more information about free tax filing electronic payment options.

Taxpayers should take advantage of this free online tax filing program.

source: irs.gov