The Islander. (St. Simons Island, Ga.) 1972-current, August 31, 2009, Image 15

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The Islander., August 31, 2009, Image 15

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Newspaper Page TextTHE ISLANDER, AUGUST 31, 2009, PAGE 15 When You want the Job Done Right * Eight tips for taxpayers who owe money to the IRS RS Summertime Tax Tip 2009-15 Six things you need to know about mortgage workouts IRS Summertime Tax Tip 2009-09 There is tax relief for strug- 4. Debt forgiven on second gling homeowners. If your homes, rental property, busi- mortgage debt is partly or ness property, credit cards or entirely forgiven at any time car loans does not qualify for during 2007 through 2012, you the tax-relief provision. In some may be able to claim special tax cases, other kinds of tax relief relief on your federal income tax — based on insolvency, for exam- return for that year. pie — may be available. Here are six things the IRS 5. If your debt is reduced or wants you to know about mort- eliminated you should receive gage debt forgiveness. a Form 1099-C, Cancellation 1. Normally, debt forgive- of Debt, from your lender. By ness results in taxable income, law, this form must show the However, under the Mortgage amount of debt forgiven and Forgiveness Debt Relief Act the fair market value of any of 2007, you may be able to property given up through fore- exclude from tax up to $2 mil- closure. lion of debt forgiven on your 6. Taxpayers who qualify principal residence. The limit is claim the special exclusion by $1 million for a married person filling out Form 982, Reduc- filing a separate return. tion of Tax Attributes Due to 2. Debt reduced through Discharge of Indebtedness, and mortgage restructuring, as well attaching it to their federal as mortgage debt forgiven in income tax return for the year, connection with a foreclosure, For more information about may qualify for this relief. the Mortgage Forgiveness Debt 3. The debt must have been Relief Act of 2007, visit the IRS used to buy, build or substan- Web site at IRS.gov. A good tially improve your principal resource is IRS Publication residence and must have been 4681, Canceled Debts, Foreclo- secured by that residence. Debt sures, Repossessions and Aban- used to refinance qualifying debt donments. This publication and is also eligible for the exclusion, Form 982 can be downloaded but only up to the amount of from IRS.gov or ordered by call- the old mortgage principal, just ing 800-TAX-FORM (800-829- before the refinancing. 3676). □ IRS Summertime Tax Tip The vast majority of Ameri cans get a tax refund from the IRS each spring, but what do you do if you are one of those who received a tax bill? Here are eight tips for taxpayers who owe money to the IRS. 1. If you get a bill this summer for late taxes, you are expected to promptly pay the tax owed including any additional penal ties and interest. If you are unable to pay the amount due, it is often in your best interest to get a loan to pay the bill in full rather than to make installment payments to the IRS. 2. You can also pay the bill with your credit card. To pay by credit card contact either Offi cial Payments Corporation at 800-2PAYTAX (also www.offi- cialpayments.com) or Link2Gov at 888-PAY-1040 (also www. payl040.com). 3. The interest rate on a credit card or bank loan may be lower than the combination of interest and penalties imposed by the Internal Revenue Code. 4. You can also pay the bal ance owed by electronic funds transfer, check, money order, cashier’s check or cash. To pay using electronic funds transfer you can take advantage of the Electronic Federal Tax Payment System by calling 800-555-4477 or 800-945-8400 or online at www.eftps.gov. 5. An installment agreement may be requested if you cannot pay the liability in full. This is an agreement between you and the IRS for the collection of the amount due in monthly install ment payments. To be eligible for an installment agreement, you must first file all returns that are required and be current with estimated tax payments. 6. If you owe $25,000 or less in combined tax, penalties and 2009-15 interest, you can request an installment agreement using the web-based application called Online Payment Agreement found at IRS.gov. 7. You can also complete and mail an IRS Form 9465, Install ment Agreement Request, along with your bill in the envelope that you have received from the IRS. The IRS will inform you usually within 30 days wheth er your request is approved, denied, or if additional informa tion is needed. If the amount you owe is $25,000 or less, pro vide the monthly amount you wish to pay with your request. At a minimum, the monthly amount you will be allowed to pay without completing a Col lection Information Statement, Form 433, is an amount that will full pay the total balance owed within 60 months. You may still qualify for an installment agreement if you owe more than $25,000, but a Form 433F, Collection Informa tion Statement, is required to be completed before an installment agreement can be considered. If your balance is over $25,000, consider your financial situa tion and propose the highest amount possible, as that is how the IRS will arrive at your pay ment amount based upon your financial information. 8. If an agreement is approved, a one-time user fee will be charged. The user fee for a new agreement is $105 or $52 for agreements where payments are deducted directly from your bank account. For eligible indi viduals with incomes at or below certain levels, a reduced fee of $43 will be charged, and is auto matically figured based on your income. For more information about installment agreements and other payment options visit the IRS Web site at IRS.gov. IRS Publications 594, The IRS Col lection Process and 966, Elec tronic Choices to Pay All Your Federal Taxes also provide addi tional information regarding your payment options. These publications and Form 9465 can be obtained on the IRS.gov Web site or by calling 800-TAX- FORM (800-829-3676). Additional information can be found on this forms or pub lications: • Form 433-F, Collection Information Statement • IRS Publication 594, What You Should Know About The IRS Collection Process • IRS Publication 966, Elec tronic Choices to Pay All Your Federal Taxes For more information, visit www.irs.gov. □ Bruce Kennedy Tire Company Honest, friendly service from a name you can trust! Oil Changes Brakes • Tires A.C. • Alignment 2928 Norwich Street Brunswick, GA 264-6578 phone 264-6580 fax Hours: Mon.-Fri. 8 a.m. - 5 p.m. A “Timely Care for the Life of Your Pet” Jan G. 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