Tax Tips

With the April 15 tax deadline looming, many feel the pressure to get taxes done. Whether you're filing you tax return youself or enlisting the help of a commercial tax service, make sure you are aware of all you options, North Carolina's Attorney General Roy Cooper says.

We all want a big refund check, but think twice befoe you opt for that "instant" refund offer and sign up for a refund anticipation loan (RAL). These enticing deals seem perfect when you're in need of quick cash, but the fees can really add u p and there are other ways to get your refund quickly without paying more.

So don't take that rapid refund check without taking a good hard look at what it really means and what it could cost you:

Accepting a check actually means you're taking out a loan against the refund you expect to get back from the IRS. There's not guarantee that you will get a refund from the IRS, and if the IRS doesn't give you a refund, you'll still have to pay back the loan.

As with any loan you'll also have to pay interest. But with RALs, the interest rate is usually much higher than conventional loans. Some commercial tax services also charge an extra filing fee on the RAL.

You don't need an RAL to get your refund quickly. You'll likely get a refund back in as little as one or two weeks if you file your taxes electronicallywithout having to pay a large fee.

Special rebate checks may go out to families this year as part of a federal plan to help the economy. Watch out for RALs that promise to help you get your rebate money early. Taking out a loan against your rebate could cost you hundreds of dollars in interest and fees.

Also, keep in mind that there are less expensive or even free ways to file your taxes:

Many online tax filing programs provide discounts or are free to use If you have questions about one of these sites, call the IRS customer service line at 1-800-829-1040.

There are additional options for low and middle incomee consumers who need tax help. Volunteer Income Tax Assistance (VITA) is a nationwide program that gives consumers within certain income brackets free help in submitting their taxes. VITA centers are typically located in town halls or county social service centers; it is a good idea to call firs to set up an appointment. To locate the nearest VITA site, contact the IRS at 1-800-829-1040.

In North Carolina, State Employess' Credit Union and the Local Government Federal Credit Union both offer free tax help through the VITA program for families earning less than $40,000. Credit unions and other lenders may also offer more affordable ways to take out a loan against your refund if you really need one.

You migh be entitled to refund even if you don't have to pay taxes. call IRS or Visit www.irs.gov/eitc to learn more and to see if you qualify for an earned Income Tax Credit (EITC). The EITC is a refundable federal income tax credit for low-income working individuals and families. During the 2004 tax season and estimated 64% of RAL borrowers in North Carolina received these tax credits according to the Community Reinvestment Association study.

Attorney General Roy Cooper and his staff are on the lookout for scams that seek to rob unsuspecting North Carolinians. We are here to be of servicce when you need us, but through consumer education efforts like these columns we hope to help consumers avoid problems from the start.

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