Tax return preparers gear up for season with first rush of filers

It's high season in the world of income tax return preparation."Actually we almost look like a roller coaster," Diane Laster, H&R Block enrolled agent, said Tuesday. "It gets crowded almost as soon as the W-2s and unemployment forms hit."The first rush - those expecting refunds - started last week and will continue for about three weeks, she said. The second rush - those who owe money to the IRS - starts at the end of March and runs through April 15. Laster, who has been doing taxes with H&R Block for 25 years, said 95 percent of the returns are filed electronically. But that doesn't mean paperwork isn't necessary. Clients need their W-2s and other documents verifying income and deductions, including their children's social security numbers. "The thing people forget most often is what they paid for their DMV registration," Laster said.Each year brings changes to the tax code. This is the first year filers have a choice of deducting state withholding or sales tax. The sales tax option can be advantageous if there were major purchases during the year such as a car or boat; or in the case of those who have a lot of children or lots of deductions making their state tax very low, she explained.The deduction for school tuition and fees also changed. It is now a two-tiered system with the deduction going as high as $4,000 from last year's $3,000. The income level also has increased for taking IRA deductions.Many tax preparation companies also provide immediate refund service. "You have to have very good credit and the fee changes depending on the size of the refund," Laster said.In fact the "immediate refunds" are loans and clients must sign a loan document.At H&R Block, the fee to obtain a refund within one-to-two days ranges from $30 to $110, with the cost depending on the size of the refund. That fee is in addition to other tax-preparation costs.For those who choose to do their own taxes, there are several software programs to make the job easier.At Staples in Auburn, Turbo Tax is the most popular software choice and is selling like hotcakes this time of year."The whole month of January has been swamped and it will be through February," store manager Mary Georgis said.Turbo Tax costs approximately $30 and includes both state and federal tax programs.Staples also has a tax center that has forms and information geared for businesses, Georgis said.Online filing is gaining ground every year with about 60 percent of filers choosing the Internet during 2004. And it is definitely a more efficient method, according to Bill Steiner, Northern California spokesman for the IRS."Not as many people have to handle the paperwork," he said. "If you have direct deposit it's all electronically processed so it takes only a matter of days (seven to 10) to get a refund.In the Know: Free tax return preparationFree income tax counseling, free tax return preparation and free e-filing are now available by appointment for those with low-to-moderate income.Trained volunteers for AARP are providing these free services at three Auburn locations: Veterans Memorial Hall, 100 East St., Placer Sierra Bank, 949 Lincoln Way and the Senior Center in the DeWitt Center.Help will be available at Placer Sierra Bank on Tuesdays and Saturdays and Veterans Memorial Hall on Thursdays. Call 889-9500 or (800) 878-9222 for appointments. Spanish-language assistance will be available at Veterans Memorial Hall. Senior Center appointments are available Mondays, Wednesdays and Fridays. Call 823-8172.Area coordinator Phil House said taxpayers should bring copies of last year's tax returns, Social Security cards for themselves and dependents, and this year's tax documents including W-2s, 1099s and Social Security, pension and IRA statements."New this year, free filing is available online through the IRS Web site. By clicking on the free file button, users are routed to the vendors that have contracted with the IRS for tax preparation. Two of the 15 companies are offering the service free of charge. But to take advantage of free filing, users must access the tax preparers through the IRS Web site. If they go directly to the vendor site, they will be charged the regular fees, Steiner explained. Quick refund returns aren't the only good reason to file electronically."As you go through the process, it is not just putting numbers on paper," Steiner said. "It will provide you with information to make sure you take advantage of all the things you are entitled to. You don't have to worry about worksheets or calculators. By doing it electronically, the information is saved. The software does the work. All you do is push a button to send it."Electronic filers get a confirmation message from the IRS within 24 hours. If there is a problem, the message will provide prompts to correct it.For those worried about putting their personal information out on the World Wide Web, Steiner offered some reassurance."You're using your home computer to input the information, but it always goes through a secure Web site," he said. "That's one of the things the IRS looks at when it chooses partners. They must have a secure Web site."The IRS Web site also has answers to many tax questions, with easy access to publications and instructions that can be downloaded and specific sections highlighted and printed."It used to be you had to print the entire publication," Steiner said. "Now you can highlight and select the portion you want."If the IRS Web site doesn't provide the answers and for those without access to a computer and the Internet, there are regional Taxpayer Assistance Centers, as well as a telephone helpline. But Steiner advises that callers may want to avoid the busiest times, which are Mondays and Fridays and daily from 10 a.m. to 2 p.m.In downtown Auburn Tuesday, Ronnie Dear of Brown Valley said she had already filed her taxes this year."I do it early through my accountant whether I have a refund coming or not," she said.Her friend, Janet Ludwig of Sacramento, said she waits until the last minute."I get two or three extensions and file in October," she said.The nearest IRS Taxpayer Assistance Center is at 4330 Watt Ave., Sacramento; phone (916) 974-5225. The IRS Helpline is (800) 829-1040 or visit Web site www.irs.gov.The Journal's Gloria Young can be reached at gloriay@ goldcountrymedia.com.