Tax day: Taking the fear out of filing - WMC Action News 5 - Memphis, Tennessee

Tax day: Taking the fear out of filing

By Kontji Anthony - bio | email | Follow us on Twitter

The recession has left many Americans feeling especially anxious about this year's April 15 tax deadline.

Business owner Darion Castleberry says he's feeling the pinch.

"I'll probably pay less taxes, but that also means I have made less income," he said.

Castleberry, who owns Castle One Steam Carpet, says many of his residential clients are too busy fighting to save their homes to have their carpets steam-cleaned.

He says he cut corners this year by preparing his taxes through the Volunteer Income Tax Assistance program.

"With me being self-employed, I usually pay $400 to $425."

Certified tax preparer Samantha Williams worked with Castleberry at the Highland Library tax assistance site.

She says that even if you can't pay your taxes, you can set up a payment plan. "The penalties aren't as high as they would be if you just don't file. So, you definitely need to file the return. Even if you can't put any money in with the return, you need to file the return by Wednesday."

The IRS has set up a page on their Web site about the 'What Ifs' of an Economic Downturn that answers taxpayer questions like 'What if I lost my job?' or 'What if my income declines?'

The good news is that if your income is down, you could be eligible to apply for an Earned Income Tax Credit. And a smaller paycheck means you may qualify for medical deductions and a Child Tax Credit.

Additionally, unemployment benefits have been extended (but remember - you will be taxed if you receive unemployment checks).

And you may be able to get tax credit for costs related to your job search.

"At some point, the economy is going to straighten out," said Castleberry. "And if I follow the rules, when things stabilize, I'll have everything set in gear to move forward."

Click here for questions and anwers on the IRS Web site.  

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