Eight Important Questions for Hobbyists

Summer is a time many Americans take their fishing poles and gardening tools out of storage.

Hobbies – such as woodworking, stamp collecting and scrapbooking – are often done for pleasure, but can result in a profit.

If your favorite activity does make a profit every year or so, there may be tax implications. You must report income to the IRS from almost all sources, including hobbies.

Here are eight questions that will help determine if your activity is a hobby or a business.

• Is the purpose of your activity to make a profit? Generally, your activity is considered a business if it is carried on with the reasonable expectation of earning a profit.
  
  
• Do you participate in your activity just for fun? Hobbies – also called not-for-profit activities – are those activities that are not pursued for profit.
  


• Do you depend on income from the activity? If so, your activity is likely considered a business.
  


• Have you changed methods of operation to improve profitability? If so, your hobby may actually be a business.
  


• Do you have the knowledge needed to carry on the activity as a successful business? People who carry out hobbies just for fun, often don’t have the business acumen to turn their not-for-profit activity into a profitable business venture.
  


• Have you made a profit in similar activities in the past? This may indicate your activity is a business rather than a not-for-profit hobby. An activity is presumed carried on for profit if it makes a profit in at least three of the last five tax years, including the current year – or at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.
  


• Does the activity make a profit in some years? Even if your activity does not make a profit every year, it still may be considered a business.
  


• Do you expect to make a profit in the future from the appreciation of assets used in the activity?

This indicates your activity may be a business rather than a hobby.

If your activity is not carried on for profit, allowable deductions cannot exceed the gross receipts for the activity. If you are conducting a trade or business you may deduct your ordinary and necessary expenses.

More information about not-for-profit activities is available in Publication 535, Business Expenses, available on the IRS.gov Web site or by calling 800-TAX-FORM (800-829-3676).
Link: IRS Publication 535, Business Expenses

Unemployment Benefits Tax Free for 2009

All or part of unemployment benefits received in 2009 will be tax free for many unemployed workers, according to the Internal Revenue Service.

“This morning we learned that a record 5.6 million people were receiving unemployment benefits in the middle of March. This underscores the need for the relief provided by the American Recovery and Reinvestment Act, which includes making the first $2,400 of unemployment insurance exempt from tax,” said IRS Commissioner Doug Shulman. “I urge all unemployed workers to take this special tax break into account as they plan their tax withholding and quarterly estimated tax payments for the year. This change offers a helping hand to millions of Americans who are out of work and struggling to make ends meet.”

Under the American Recovery and Reinvestment Act, enacted last month, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their tax return next year. For a married couple, the exclusion applies to each spouse, separately. Thus, if both spouses receive unemployment benefits during 2009, each may exclude from income the first $2,400 of benefits they receive.

The new law doesn’t affect the return taxpayers are filling out now. Unemployment benefits received in 2008 and prior years remain fully taxable.

Unemployed workers can choose to have income tax withheld from their unemployment benefit payments. Withholding on these payments is voluntary. However, choosing this option may help avoid a surprise year-end tax bill or a possible penalty for having paid too little tax during the year. Those who choose this option will have a flat 10 percent tax withheld from their benefits.

Unemployed workers who expect to receive more than $2,400 in benefits this year should consider having tax withheld from their benefit payments in excess of that amount. Those unemployed workers who have already chosen to have tax taken out of their benefits, should consider the $2,400 exclusion in determining whether to continue to have tax withheld.

Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end. Form W-4V is also available on IRS.gov or by calling the IRS toll-free at 1-800-TAX-FORM (829-3676).

IRS Information Related to the American Recovery and Reinvestment Act of 2009

Child and Dependent Care Credit - What You Should Know

If you paid someone to care for a child, spouse, or dependent, you may be able to reduce your tax by claiming the Child and Dependent Care Credit on your federal income tax return. Below are the top ten things you need to know about claiming a credit for child and dependent care expenses.

The care must have been provided for one or more qualifying persons. A qualifying person is your dependent child under age 13. Additionally, your spouse and certain other individuals who are physically or mentally incapable of self-care may also be qualifying persons. You must identify each qualifying person on your tax return.

The care must have been provided so you – and your spouse if you are married – could work or look for work.

You – and your spouse if you are married – must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. One spouse may be considered as having earned income if they were a full-time student or they were physically or mentally unable to care for themselves.

The payments for care cannot be paid to your spouse, to someone you can claim as your dependent on your return, or to your child who is under age 19, even if he or she is not your dependent. You must identify the care provider on your tax return.

Your filing status must be single, married filing jointly, head of household or qualifying widow(er) with a dependent child.

The qualifying person must have lived with you for more than half of 2008.

The credit can be up to 35 percent of your qualifying expenses, depending upon your income.

For 2008, you may use up to $3,000 of the expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals.

The qualifying expenses must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from your income.

If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. If you are a household employer, you may have to withhold and pay social security and Medicare tax and pay federal unemployment tax. For information, see Publication 926, Household Employer's Tax Guide.


Publication 503, Child and Dependent Care Expenses (PDF 167K)
Form W-10, Dependent Care Provider’s Identification and Certification (PDF 31K)
Form 2441, Child and Dependent Care Expenses (PDF)
Form 2441 Instructions (PDF 32K)
Publication 17, Your Federal Income Tax (PDF 2,075K)
Tax Topic 602

Can You Claim the Child Tax Credit?

With the Child Tax Credit, you may be able to reduce the federal income tax you owe by up to $1,000 for each qualifying child under the age of 17.

A qualifying child for this credit is someone who meets the following criteria:

Age - Was under age 17 at the end of 2008

Relationship - Is your son, daughter, adopted child, stepchild or eligible foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these individuals or other eligible person who lived with you all year as a member of your household

Citizenship - Is a U.S. citizen, U.S. national or resident of the U.S.

Support - Did not provide over half of his or her own support

Lived with you - Must have lived with you for more than half of 2008 (note that some exceptions to this criteria exist)

The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies depending on your filing status:

Married Filing Jointly $110,000
Married Filing Separately $ 55,000
All others $ 75,000

In addition, the Child Tax Credit is generally limited by the amount of the income tax you owe as well as any alternative minimum tax you owe.

If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim some or all of the difference as an “Additional” Child Tax Credit. The Additional Child Tax Credit may give you a refund even if you do not owe any tax. The total amount of the Child Tax Credit and any Additional Child Tax Credit cannot exceed the maximum of $1,000 for each qualifying child.

Form 8812, Additional Child Tax Credit (PDF 56K)
Publication 972, Child Tax Credit (PDF 128K)
Form 1040 (PDF 176K)
Form 1040 Instructions (PDF 1,101K)
Form 1040A, U.S. Individual Income Tax Return (PDF 136K)
Form 1040A Instructions (PDF 428K)
Tax Topic 606
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Tax Help - "What The Preacher Man Joined Together, Let NO Man Separate!"

Remember those wonderful vows you took on your wedding day? Well, those same vows can sometimes either make or break you when it comes to calculating tax liability or the reduction thereof............

One of the more common questions that I am asked is "Would it be better if my spouse and I file separately". My response is always, no, because you are going to lose out on deductions and credits.

Unfortunately, in marriage and life, everything is not always "Happily Ever After". Even if one spouse has tax liability from a previous marriage, owes child support or student loans, filing jointly is always the best remedy. The one thing that most couples do not realize is that you can file jointly and reap the best benefits but yet file Form 8857 for Innocent Spouse relief.

Some couples, even when life is good, decide to file separately. Say perhaps, one spouse gets a CP-2000 for changes on their return due to loosing deductions and benefits resulting from the separate filing. Then they decide they want to amend their returns and file jointly.

Here's the best way to remember the rules for amending a return under these circumstances:

"WHAT THE PREACHER JOINED TOGETHER,

LET NO MAN (OR THE IRS) SEPARATE!"

Once you file jointly, you cannot amend to file separate.

But.......you can go from married filing separate to married filing joint!

Read more about the deductions and credits that you can lose by filing separately:

Publication 501, Exemptions, Standard Deduction and Filing Information
Publication 504, Divorced or Separated Individuals
Form 8332 (PDF), Release of Claim to Exemption for Child of Divorced or Separated Parents
Tax Topic 354, Dependents

Form 2120 (PDF), Multiple Support Declaration

Publication 970, Tax Benefits for Education
Tax Topic 605, Education Credits
Form 8863 (PDF), Education Credits (Hope and Lifetime Learning Credits)

Tax Topic 601, Earned Income Credit

Tax Help - "Let's Educate the Self-Employed"

Most folks dread dealing with the IRS. But little do they know that the IRS can be a helpful tool to make any small business successful. They provide helpful educational tools that will help all types of taxpayers.


The Internal Revenue Service today launched a campaign to help educate new self-employed small business owners about federal tax responsibilities.

The campaign kick-off coincides with the Small Business Administration’s annual Small Business Week, April 21-25, which recognizes outstanding small business owners for their contributions to the nation's economy and their personal achievements.

“One of the biggest challenges faced by people starting out in business is understanding and meeting their tax filing requirements,” said Kathy Petronchak, commissioner of the IRS’s Small Business/Self-Employed operating division. “It’s a new, different and potentially overwhelming experience for them. We want new small business owners to know that the IRS has resources to help them learn about their federal tax responsibilities and avoid common pitfalls.”

The campaign will provide new Schedule C, Profit or Loss from Business, filers with improved and updated educational materials through a variety of channels, including IRS.gov, small business workshops and other outreach events.

Schedule C is filed by sole proprietors (one-owner businesses) as an attachment to their Form 1040 individual income tax return. Self-employed individuals with less complex situations – including business expenses of less than $5,000, no net losses and no employees – may be able to file Schedule C-EZ, Net Profit for Business.

About one in seven federal income tax returns includes a Schedule C or Schedule C-EZ. Taxpayers filed over 21 million Schedules C for tax year 2006, reporting overall net profits from sole proprietorships totaling more than $269 billion.

In this introductory phase of the campaign, IRS is offering some basic tips to avoid potential problems:

Classify workers properly as employees or independent contractors as determined by law, not the choice of the worker or business owner;

Deposit federal employment taxes, called trust fund taxes, according to the appropriate schedule;

Start making quarterly estimated-tax payments to cover your own income tax and social security self-employment tax liability;


Keep good records to protect your personal and financial investment and to make tax filing easier;

Consider a tax professional to help you with Schedule C;

File and pay your taxes electronically; it’s fast, easy, and secure;

Protect financial and tax records to ensure business continuity in the event of a disaster; and

Avoid abusive tax avoidance schemes such as the IRS’s 2008 “Dirty Dozen.

Tax Help - "Where's My Refund?"

Nearly 9.7 million taxpayers have checked the status of their 2007 federal income tax refunds online, up about 18 percent over the same time period last year.

To get to personalized refund information, taxpayers should be ready to enter their:Social Security Number (or Taxpayer Identification Number),

Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er)),

Exact refund amount shown on their tax returns.

Taxpayers can check on the status of their refund seven days after e-filing a return. For a paper return, check four to six weeks after mailing the return.

“Where’s My Refund?” also includes links to customized information based on a taxpayer’s specific situation. For example if “Where’s My Refund?” shows that the IRS was unable to deliver a refund, a taxpayer can change his or her address online. Taxpayers can avoid undelivered refund checks by having their refunds directly deposited into a personal checking or savings account.

If 28 days have passed after the IRS says it mailed a refund check, “Where’s My Refund?” enables taxpayers to initiate a trace.

New this year Spanish-speaking taxpayers can get information about the status of their federal refunds using Dónde Está mi Reembolso? available by entering the Spanish language area of the web site by clicking the Espanol link on IRS.gov. The refund trace and address change features are only available in English at this time.

Taxpayers without internet access can check the status of their refunds by calling the IRS TeleTax System at 800-829-4477 or the IRS Refund Hotline at 800-829-1954. The TeleTax refund information is updated each weekend. If you do not get a date for your refund, please wait until the next week before calling back.

Where’s My Refund? is also accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.

Some scam artists are sending phony emails, including those relating to “Where’s My Refund?”, to trick individuals into revealing personal financial information that can be used to access their financial accounts. People who want to access the genuine IRS Web site and the “Where’s My Refund?” feature should go directly to the IRS Web site by typing the address, http://www.irs.gov/, into the address` line of their Internet window. The only genuine IRS Web site is IRS.gov.

Tax Help - Are You Sure That 2004 Return Is Correct?

Can you even begin to imagine $1.2 billion dollars of money that the IRS is trying to give away? And we're not talking about the Stimulus Package monies.





Believe it or not, that's how much money the IRS is holding for taxpayers who need to file their 2004 taxes.



And now you ask, "how on earth do I get a piece of that action?". Well, it's really very simple.

To receive a chunk of this billion dollar overflow, you just need to file your delinquent 2004 tax return.

But don't forget that there's a three-year deadline for refunds. Taxpayers have three years from the original due date to file a return and ask the IRS for a refund. This statute of limitations on refunds is written directly into our tax code, section 6511 if you want to look it up. The long and the short of it is this: if you haven't filed for 2004, you should do so by April 15th, 2008. That's the final, final deadline before your refund vanishes into the government's coffers.

This 3-year deadline also applies to amended returns as well. Perhaps you forgot to take a deduction or a tax credit? The IRS will send out your extra refund from any corrections to your return, but only if the amendment is filed within this same three-year period.

It only makes sense to this preparer pull out that 2004 return and review it for additions or corrections, amend the return if necessary and got for a chunk of that change.

• Additional resources to help you prepare a 2004 return:
  Filing back taxes
  Getting documents from the IRS
  2004 federal tax forms from IRS.gov

Tax Help - IRS Providing Assistance for the Stimulus Payments

IRS Sets March 29 as “Super Saturday” to Help Retirees, Veterans and Low-Income Workers Receive Economic Stimulus Payments

WASHINGTON — The Internal Revenue Service and scores of its partners nationwide will open hundreds of locations on Super Saturday, March 29, in an effort to reach those Americans who are eligible for the economic stimulus payment but who normally are not required to file an income tax return.

Approximately 320 IRS offices will be open on Super Saturday to prepare the simple Form 1040A for people who are filing a return solely to receive their stimulus payment. IRS partners such as AARP, United Way of America and dozens of others also are making special efforts on Super Saturday to reach out to those who normally are not required to file a tax return.

“We don’t want any Americans to miss out on their economic stimulus payment. For millions of Americans, filing a tax return is not routine. Their income is either too low or not taxable. But this year, filing a 2007 tax return is the only way to receive an economic stimulus payment. Super Saturday is one way the IRS and its partners are working to ensure everyone eligible receives a stimulus payment,” said IRS Commissioner Doug Shulman.

Super Saturday, part of an extensive outreach effort by the IRS, is a one-day event for which Americans can plan in advance. It also highlights the need for all taxpayers to file as soon as possible to avoid the April 15 rush.

Millions of Americans who do not pay federal income taxes may be eligible for a $300 payment ($600 for married couples) if they have at least $3,000 in qualifying income. Qualifying income is defined as any combination of earned income such as wages, nontaxable combat pay and certain benefits from Social Security, Veterans Affairs and Railroad Retirement. Many households also will be eligible for an additional $300 for each qualifying child younger than 17.

The IRS this week is mailing 20.5 million Social Security and Veterans Affairs recipients a Package 1040A-3 that contains all the information they need to file a return immediately. Railroad Retirement recipients, low-income individuals and military personnel with nontaxable combat pay also can use the package if they need to file solely to receive the payment.

The 320 IRS offices are located in all 50 states and the District of Columbia. Operating hours will be 9 a.m. to 3 p.m., although some may be open longer. IRS employees will help prepare the Form 1040A returns for low-income workers, retirees, disabled veterans and others. IRS field assistance personnel also will visit nursing homes and similar locations to prepare returns.

A list of IRS offices and partner sites providing assistance on Super Saturday is available at http://www.irs.gov/ or by calling the IRS Hotline, 1-800-906-9887, for free assistance locations. If taxpayers have economic stimulus questions on March 29, they can call 1-866-234-2942. These phone services are available on March 29 between 9 a.m. and 3 p.m. local time. (Alaska and Hawaii service is based on Pacific Time Zone.)

IRS partners are actively involved in reaching out to these people to help them receive their payments. Many are using innovative techniques to ensure eligible recipients who normally are not required to file a tax return receive the payment they are due. Here is just a brief sampling of partner activities and the complete list is still evolving:

• 
  
  Sweetwater, Fla.: Miami-Dade County Mayor Carlos Alvarez will conduct a press conference at City of Sweetwater's Jorge Mas Canosa Youth Center free tax preparation site staffed by Florida International University students.


• 
  
  Baltimore, Md.: Baltimore Commission on Disability will help prepare returns for people with disabilities and others;


• 
  
  Houston, Texas: Ripley Neighborhood Center will prepare returns for Social Security recipients and veterans;


• 
  
  Manning, S.C.: Antioch Baptist Church will host a tax preparation day for Form 1040A filers;


• 
  
  Boston, Mass.: Mayor Thomas Menino will open 10 locations throughout the city to prepare Form 1040A returns;


• 
  
  Aurora, Col.: IRS partners printed Economic Stimulus Payment information in Vietnamese and will be available at two locations to assist the Vietnamese community;


• 
  
  Fresno, Calif.: Hispanic Internal Revenue Employees (HIRE) chapter members have volunteered to prepare returns at the Fresno Veteran’s Hospital and the Aging Adult Center.
  

Starting in May, the IRS will issue economic stimulus payments of up to $600 ($1,200 for married couples) plus additional payments of $300 for each for qualifying child. Most Americans don’t need to do anything more than file their tax returns as they normally do. The maximum payments will begin to phase out at $75,000 in adjusted gross income ($150,000 for married couples).

The IRS encourages everyone who is required to file a tax return to do so prior to the April 15 deadline to enable the agency to process the return and to calculate stimulus payment eligibility and amounts. Taxpayers who already have filed a tax return can calculate their potential payment amounts by visiting http://www.irs.gov/.

The IRS reminds taxpayers that they can get their stimulus payments faster by using direct deposit when they file their tax return.

In addition, the IRS urges taxpayers to file electronically. For people who normally are not required to file a tax return, the IRS and the Free File Alliance have a special program set up to allow for free electronic filing. For those with computer access, IRS Free File –Economic Stimulus Payment is available at IRS.gov.

Also, people should be wary of unsolicited e-mail or telephone calls from anyone claiming to be from the IRS. Don't click on any links. Instead, forward the email to phishing@irs.gov, and then delete it. Use the same email address to report unsolicited telephone calls. The only official IRS

Web site is located at http://www.irs.gov/.

Related Items:
Super Saturday Locations for March 29
Economic Stimulus Payment Information Center

Tax Debt Help - It's Time to Pay the Man!

It's once again time to get out those checkbooks, credit cards and other payment options for paying your tax debt to Uncle Sam.

Kay Bell, freelance writer for BizRate and Don't Mess With Taxes provides a plain and simple approach to knowing how to get Uncle Sam paid off.

"If this year's tax filing deadline will be a pay day from you to the IRS and you're caught short of cash, the IRS will work with you. They give you several payment options.

Most of all, even if you can't pay your tax bill, go ahead and file your return on time. This way you'll avoid the IRS's failure-to-file penalty of 5 percent per month (up to a maximum of 25 percent) of your balance due. You'll still face the failure-to-pay penalty each month your bill is outstanding, but it's only 0.5 percent of the amount you owe.

Paying with plastic

Now take a look at what you owe.

Some taxpayers find they can pay part or all of their tax bill by putting it on a credit card. The IRS has awarded contracts to two companies to accept credit card charges: Official Payments and Link2Gov. Both accept payments from electronic as well as paper filers, either via phone or the Internet. They take American Express, Discover, MasterCard or VISA.

Credit card tax payment processors

Link2Gov Corp.
(888) PAY1040(888) 729-1040
Pay1040.com

Official Payments Corp.
(800) 2PAYTAX(800) 272-9829
Officialpayments.com

Remember, however, that while this may get you off the hook with Uncle Sam, it will cost you in other ways. Each company has its own fee schedule (generally 2.49 percent of your tax bill or a minimum $1) connected with charged payments.

And if you don't pay off your credit card in full, you'll start racking up interest charges on your account. In some cases, however, your credit card interest charges might come to less than IRS penalties and interest you'd owe if you don't pay on time. So before you decide to pay with plastic, run the numbers so that you don't pay anyone, neither Uncle Sam nor your credit card company, any more than necessary.

Installment plans

If your tax bill is too large for a credit card, the IRS is willing to take monthly payments. You even get to pick your monthly payment amount and the day it will be due.

In fact, if you've previously filed (and paid) taxes on time, your tax bill is less than $10,000 and you convince the IRS that you can't come up with that much all at once, the agency can't turn down your request. Your installment plan, however, must pay off the due tax in at least three years. To get the program going, attach Form 9465, Installment Agreement Request, to the front of your tax return.

Financially strapped taxpayers also have the option of using an installment plan to make partial payments of tax liability. The IRS had previously allowed partial installment payments but stopped the practice in 1998 when an IRS attorney raised questions about the IRS's authority to accept such payments without statutory authority. Congress officially granted the IRS the power to resume partial payment installment agreements as part of the American Jobs Creation Act of 2004.

While the IRS argued for legislative reinstatement of the partial-payment option, approval is not automatic. Taxpayers who request a partial-payment installment agreement must provide detailed financial information, including data on equity assets, that the IRS will verify. Plus, the IRS will review the arrangement every two years to determine whether the taxpayer's financial status has changed, and if it has improved, the amount of installment payments could increase or the agreement could be terminated.

Regardless of whether you pay your tax bill in full or partially via an installment agreement, keep in mind that paying over time, even to Uncle Sam, will cost you more. The IRS charges a one-time fee of $105 unless you make arrangements to have your installment payments made via direct debit from your bank account.

The fee drops to $52 for direct debit agreements. Some lower income taxpayers might be able to pay a reduced fee of $43, which was the previous user fee for all installment agreement applicants. The rate increase took effect in 2007.

You'll be billed for any fee with your first payment. Plus, penalties and interest continue to accrue to your unpaid tax bill. The IRS may also file a federal tax lien against you, which will be released when you pay off your installment loan.

If you want to apply for an installment arrangement, the IRS now accepts online applications.
Let's make a dealWhat if you can't pay off your tax bill, in whole or part, in three years or five years or ...? Then it may be time to negotiate.

The IRS might be willing to accept an offer in compromise, or an OIC; a lump-sum payment you offer to make that is less than the total amount of tax you owe. In these cases, the agency hopes to get some taxpayer money sooner than it would after years of costly collection efforts.

The key here is that the amount must reasonably reflect your ability to pay. It's not merely haggling to get your tax bill reduced. In fact, the IRS is stepping up its efforts to weed out those taxpayers who use the offer-in-compromise route merely to delay paying their bills. Since Nov. 1, 2003, any taxpayer making a reduced payment offer has had to include a $150 application fee with the request. The agency hopes this means that it will hear only from folks who truly need the negotiated bill.

The IRS will review your financial situation and future income potential to determine whether your offer is appropriate. Be warned, however. Uncle Sam says this program was designed only for extreme cases and very few filers will qualify for the program under the terms they would like. If you believe your situation does indeed meet the requirements, you need to file two forms:

Form 656, Offer in Compromise, and Form 433-A, Collection Information Statement.

You must also submit the $150 application fee along with Form 656-A, Offer in Compromise Application Fee Instructions and Certification. (The fee is waived for filers who have little or no income. They can claim a poverty exception when they file Form 656-A.) If you don't send this form along with your fee, the IRS will return your offer application "without further consideration." If you submit everything as required, and the IRS determines you do not meet the qualifications and rejects your offer, you are out $150. But if the agency accepts your offer, your fee will go toward your new payment amount.

Then the IRS wants even more upfront. Your offer must include a 20 percent payment for lump sum cash payment offers or your first installment payment if you're seeking a periodic payment plan.

Regardless of which tax bill-payment method you choose, make your decision now. Delay will only compound your financial and tax debt problems. And try to pay something. By sending in any amount when you file your return, at least you'll ultimately reduce your interest and penalty charges."

Additional Resources:

Kay Bell who is a freelance writer for "Don't Mess With Taxes" and also writes for BizRate. Check out her blog!