How to avoid a taxing time

Filing early, electronically helpful

Because April 15 falls on a Saturday this year, the Internal Revenue Service has granted you a two-day reprieve to file your annual income taxes.

That comes as cold comfort to those filers who merely will procrastinate until the last minute, rushing to the post office after hurriedly hunting for receipts, forms or some desperate deduction. Still, it doesn’t have to be that way. Here are a few tips for making tax season more tolerable and potentially more profitable:

¢ Go digital. The IRS estimates that the average household will devote between 14 and 16 hours to preparing Form 1040 and related forms and schedules, not including schedules A or D. Intuit, the maker of TurboTax, the best-selling tax-preparation software, claims its users will be done in about four hours. Filing your return electronically also has its rewards: The IRS estimates that it processes refunds for electronic returns in half the time that it takes with a paper return. Unless you meet income requirements (check the guidelines at www.irs.gov/efile), expect to pay from $10 to $40 to transmit the most common federal forms.

¢ Tackle taxes early. Even if you’re organized, chances are that one or two pieces of paper – an earnings statement mistaken for junk mail or a misfiled receipt – have gone astray. Or you may have questions for a tax professional or the IRS. Build in at least two weeks to accommodate these eventualities.

¢ Consider your sales taxes. The law allows you to deduct either state sales tax or income tax – whichever is greater – on your federal form. If you haven’t kept sales receipts, the Form 1040 instructions provide a default figure, based on income and the number of your exemptions.

300 dpi 4 col x 8.5 in / 196x216 mm / 667x734 pixels Michael Hogue color illustration of a taxpayer caught in a tangle of paperwork and receipts before the end of the year. The Dallas Morning News 2004 With PFP-TAXMOVES-BIZPLUS, The Dallas Morning News by Pamela Yip

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¢ Could you be KO’d by AMT? An estimated 3.6 million taxpayers are expected to get hit this year with AMT, the Alternative Minimum Tax that originally was intended to snare the wealthy with inordinately high tax deductions. Unfortunately, it’s also walloping middle-income taxpayers with big families, folks who pay lots of state tax and those with high mortgage interest. For an estimate of your possible AMT tab, visit the IRS’s AMT Assistant at www.irs.gov/app/amt.

If, despite your best intentions, you can’t meet the April 17 filing deadline, request an extension. In the past you could extend the deadline for four months, and then another two. Now, there’s just one extension – albeit a generous one – until Oct. 16.