Deadline approaches for
filing taxes
By Heather Mangold
City
Editor
One in four Hoosiers have not yet filed their taxes,
said Carol Young, project manager at H&R Block.
For those who have not filed, there is still time
to prepare; the deadline to file is April 16.
Cheryl Denk, publications director for the Indiana
Department of Revenue, said that she encourages taxpayers that have
not yet filed to do so electronically.
"We think of electronic filing as a win, win situation,"
said Denk. "It cuts down on taxpayer money and delivers results more
quickly and accurately."
Denk said filing taxes electronically is 99 percent
accurate, whereas filing on paper using traditional methods is only
60 percent accurate.
Denk said there is a risk, when filing through
paper, that errors could become a problem. Filing a paper return means
that someone from the department of revenue would have to sit down at
a computer and enter information. Filing electronically provides taxpayers
with a bar code. The bar code consists of all the information needed
for a taxpayer to file and no one but the computer and the taxpayer
will view the information, said Denk.
Other options for filing taxes include paying with
a credit card over the phone or the Internet with a program called IN
E-PAY.
Whether taxpayers are expecting a refund or if
they owe money, they can still file electronically. Young said that
90 percent of returns filed by H&R Block will be done electronically.
If taxpayers do not like the idea of filing over
the Internet or over the phone, another option is to contact local offices
that provide assistance for taxpayers.
A district office of the Department of Revenue
in Lafayette is an example of one such office. The office provides a
Volunteer Income Tax assistance program that provides free tax return
preparation help to low income, elderly and special-needs taxpayers.
Denk said that students would be eligible to use this assistance. Another
service provider is the office of H&R Block.
H&R Block provides free consultation for taxpayers
that have questions concerning their taxpaying responsibilities. Young
said students should be aware of the tax laws that apply to them.
There are two education credits that apply to students.
The two credits are for students of higher education and provide an
opportunity for students to receive a percentage of their tuition.
Hope credits are for freshman and sophomores, entitling
them to 20 percent of the first $1,000 they pay for tuition, and 50
percent of the second $1,000.
Higher learning credits are for juniors and seniors
of accredited institutions. The higher learning credits entitle those
students to 20 percent of the first $5,000 they pay for tuition.
EXTENSIONS:
In addition to providing information about laws
that apply to students, the company also educates taxpayers about extensions.
Young said, "A lot of people have misconceptions
about extensions."
Extensions only allow taxpayers an extended period
to send in paperwork. Young said that even if taxpayers cannot pay their
taxes by April 16, they still need to file their taxes electronically
or send their information through the mail.
"People can be fined for failure to pay or failure
to file," said Young.
However, if a taxpayer does not owe any amount
with a tax return, he or she is not required to file for an extension
of time to file.
REFUND STATUS:
To check the status of your refund, the Indiana
Department of Revenue provides an automated information line. Taxpayers
would need a copy of a completed tax return in order to use this service.
To use this service call (317) 233-4018. The service is available Mondays
at 8 a.m. through Saturdays at 10 p.m. The department recommends that
taxpayers wait 12 weeks from the date they filed their taxes before
calling to check on the status of refunds.
 DEDUCTIONS:
Students that are residents of states other than
Indiana, but are employed in this state could be eligible for the Non-Indiana
Locality Earnings Deduction. If a student received income subject to
both Indiana State Income Tax and a local tax in another state, he or
she may be allowed to deduct up to $2,000.
Another deduction that may pertain to Purdue students
is the deduction for Enterprise Zone employees. Certain areas within
Indiana have been designated as enterprise zones. These zones are established
to encourage investment and job growth in distressed urban areas. Portions
of Lafayette have been named Enterprise Zones. If a student lives in
an enterprise zone, such as Lafayette, and also worked for a qualified
employer in that zone, he or she may be able to take this deduction.
If eligible, the employer should provide a form called an IT-40QEC.
The amount of the deduction is one-half of the earned income shown on
the form or $7,500, according to the Indiana income tax booklet provided
by the Department of Revenue.
Other deductions are available.
EXEMPTIONS:
Taxpayers are allowed a $1,000 exemption on their
Indiana tax returns for each exemption they claim on federal returns.
However, if no exemption is claimed on your federal tax return, you
can still claim yourself and any qualifying dependents on this return,
according to the tax booklet.
More exemptions are available.
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