axman!!  Have you seen those commercials with the Beatles song “Taxman” playing in the background?  I can almost feel the collective cringe around the world of my fellow Beatles fans…yet it serves as a reminder that April 15th is looming once again. Uncle Sam wants you to file those income tax returns and they just keep making it easier to file the forms and pay those taxes.  Check out the three ways to file below.  And unless you were on safari for most of last year, you probably know that there were new tax laws enacted in 2001.  Almost every taxpayer was affected by the changes.  Some of the more interesting changes are highlighted.  And then there are those annual changes and increases in various rates to keep up with, so follow along, if you will.

     There are three ways to file with the IRS:

Paper forms Electronic filing or E-file Telefile

     Paper forms are mailed out sometime in late December or early January.  If you have not received forms in the mail, you may pick up forms at your local post office or the local IRS office.   In Maine your local offices are:

     The IRS website also has downloadable forms and instructions.  Their web site is http://www.irs.gov/.  If you need to read up more about certain topics, go to http://www.irs.gov/forms_pubs/pubs.html to get a publication that provides in-depth coverage.

     To e-file you can purchase your own software, go to a tax preparer, or hop on-line to various websites to find this service.  Once again, the IRS website contains useful information and actually lists various vendors for e-filing.  This listing can be found at http://www.irs.gov/elec_svs/partners.html.

     The telefile system is for those of you who have very few items to report.  You can use Telefile if you received the package in the mail and meet the following requirements:

1. You are still using the address printed on your Telefile Tax Record for mail purposes;

2. You file single or married filing jointly and you have no dependents

3. Your income is only from:
   
   a.  Wages, salaries, tips, taxable scholarship or fellowship grants
   b.  Unemployment compensation
   c.  Interest (less than $400 and no withholding deduction);
   d.  Alaska Permanent Fund Dividends;
   e.  Qualified state tuition program earnings

    4.   Your total taxable income of less than $50,000;

     To file using telefile, you must use a touch-tone telephone.   Do not use a cordless phone, or a cell phone.

     The Maine Revenue Services website is found at: http://www.state.me.us/revenue/.  You can visit this website to obtain forms, instructions, and other information.  You can also use Internet file right on their website.  For e-file, you received a notice with pin numbers from Maine in December 2001.  If you still have this notice in your files, make sure you use them.  They change the pins every year as a matter of security.

     One of the most discussed tax credits that Maine came up with is the "Quality Child Care Credit".  This program doubles the amount of employer-assisted day care credit and the individual credit for childcare expenses but only if your child care provider is certified for this program.  The certification comes from the Department of Human Services.  If you pay for child care and usually get the child care credit, ask your daycare provider if they are certified for this new program.  More information can be obtained from DHS at 1-207-287-5099.

     New this year is the option to have your refund put directly into a NextGen account.  For those of you lucky enough to get a refund from Maine, you can have your refund deposited directly into a NextGen College investment account.  This account is a relatively new savings program for parents to start saving for the kids' college costs.  Contact FAME for more info about the NextGen program at 1-800-228-3734.

     BETR - Another often overlooked tax rebate program here in Maine is the BETR program.  Businesses have to pay personal property tax to the town or municipality that they do business in.  A portion of this tax can be refunded if you are willing to file the necessary paperwork.  Forms 801 and 800 must be filed with the tax assessor’s office and with the State of Maine.  You can get information on this program from the Maine Revenue Services website at:  http://www.state.me.us/revenue/forms/2001forms.html

     The New Tax Law – The most immediate effect was the rebate check you may have received in the mail.  Did you get your check?  You should have received the lesser of 5% of the first few thousand dollars of your income or $300, $500, or $600 depending on you filing status.  If you did not receive your check, be sure to fill out the rate reduction credit worksheet in your Form 1040 tax instructions to get your fair share.

     If you were a taxpayer who was claimed as a dependent on another person's return in 2000, you were not eligible for a rebate check.  To obtain your tax relief, compute your taxes for 2001 using the Tax Computation Worksheet for Certain Dependents (Form 1040 instructions, page 33) that incorporates the benefit of the 10% tax bracket.  Same goes for those of you who are dependents in 2001 as well.

Rebecca J. Erickson, CPA is a self-employed tax specialist practicing in the Portland area.  She has holds a master's degree in Taxation from Bentley College and specializes in fiduciary taxation.