"The late filing fee could be as much as 25% of the balance," said Tax Professional Jack Mayekawa, warning procrastinators of the penalties of filing late.
One group not subject to the April 15th deadline, families of soldiers in Iraq. "They have 180 days after they return to file their returns. Those that are hospitalized, they have 180 days after they are released from the hospital," said Mayekawa.
|2003 Tax Guide|
Also new this year, a credit for school teachers. "There's a classroom teacher expense this year that's brand new. A lot of the teachers say, 'I pay out of my pocket to pay for paper this year,' they have a $250 deduction to do that," he said.
There's help for college graduates, suffering under the debts of student loans. "There's been a little bit more leeway in terms of paying the student loan off. (Deductions for student loan interest) used to end after 60 months, now that's extended, so a little bit more leeway there," said Mayekawa.
For the middle-aged and seniors, encouragement to invest in retirement accounts. "The IRA accounts. This year they can put up to $3,000 which is more, but then if they are over 50, they can put an additional $500," he said.
A final warning that filing for an extension buys time but accumulates interest. "The extension is for time. It does not eliminate the fact that if you owe money the interest starts on April 15th, so it just keeps accumulating," he said.
If you can't meet the deadline, you can file for a four-month extension, but keep in mind that interest starts building immediately, although it could be as low as 1/2 of 1% of the balance due. And a note that if you're expecting a refund, filing for an extension isn't as necessary as if you owe.