Income Tax Day Loopholes, Tips for You

It's among the most dreaded days of the year for millions of Americans and it's fasting approaching. With distractions such as the Super Bowl and Olympics behind them, Americans – rich and poor – will begin their final assault on their taxes.

Though April 15 is the official deadline to file income taxes, unless the IRS grants an extension, Americans have begun the yearly ritual of sitting at their kitchen tables calculating taxable incomes and yearly deductions.

"The prospect of a healthy refund typically spurs many of us to get to work sooner rather than later to do our taxes," says Cindy Hockenberry, a research coordinator for the National Association of Tax Professionals, a nonprofit professional group. "This year more people than ever are looking to get refunds."

While the majority of Americans strive to submit their tax returns ahead of the April 15 deadline, the IRS estimates that at least 20 million - one in seven tax filers – will wait until the final week. That includes Americans who line up at the local post office or those who click their mouse buttons through tax software or the IRS' own electronic tax forms.

That's especially true for the rising tide of unemployed in America for whom tax time often can be frustrating and confusing.

"You're seeing a trend where more people have shifted from being full-time employees to part-time or freelancers," says Adam Gottlieb, a certified public accountant with Martin Cohen CPA, a Manhattan firm that offers accounting, tax and small business consulting services. "That's a direct result of this economy."

For those who still haven't filed their taxes, has compiled a list of tips on deductions and time-saving tax tricks.

1. File online for free. No matter what your income, you can file your tax returns online for free through the IRS Web site at

Those who have an adjusted gross income of $57,000 or less in 2009 can also qualify for free software for step-by-step help.

If you're eligible for a tax refund, filing electronically will help you get that cash much more quickly than mailing in your returns.

2. File for a tax extension but get ready to pay. If you just can't get your returns finished in time, file an extension. Everyone is eligible for an extension, which allows taxpayers six more months - until Oct. 15 - to file returns and millions of Americans take advantage of extensions every year.

The bad news is that, like tax returns, extension requests are also due April 15, and filing one doesn't mean you get more time to pay your taxes. It just means you get more time to finish your paperwork. Taxpayers filing extension requests must still estimate roughly how much they owe the IRS (if anything) and send a check for that amount by April 15.

3. Don't pay too little. If you're in a hurry and filing an extension, a good way to determine how much you owe is to use last year's tax filings as your guide. Given the beating that the recession has had on many people's income and investments, if you owe money, chances are you owe less than last year.

But don't drop your estimate too much: If the IRS finds you haven't paid enough, you'll face fees and penalties.

Last year's tax returns will be less helpful if you've had a major life change, like purchasing a house or switching jobs. In that situation, it might be best to consult a tax professional.

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