Seniors can get free help with their taxes, but may not want to this year | The Sun Herald

Seniors and other low-to-moderate-income taxpayers can get free help filing their taxes at locations throughout South Mississippi starting Feb. 1.

Through the AARP Foundation Tax-Aide Program, offered in conjunction with the IRS, trained volunteers can complete and e-file tax returns for many taxpayers at no cost. The service will be offered at eight libraries and one church in the three Coast counties.

Those who use the free service need to bring their Social Security cards, photo IDs, income tax documents they get in the mail such as W-2 forms, SSA-1099 and statements that generally arrive in the mail in January and show interest dividend, retirement, investment and healthcare totals. They also should bring their 2016 tax return. AARP membership is not required.

The IRS Volunteer Income Tax Assistance and the Tax Counseling for the Elderly programs also offer free tax help for taxpayers who generally make $54,000 or less, are disabled or who speak limited English. In South Mississippi, Mercy Housing and Human Development in Gulfport provides these services in English, Vietnamese and Spanish beginning Jan. 29. Appointments are required by calling 228-896-1945 and the service begins Jan. 29.

Those seniors who are familiar with filing taxes and handy with a computer also can file their own taxes for free through H&R Block, TurboTax and other tax services that walks the taxpayer through the filing with a series of questions. More information on filing for free is available through the IRS website.

In some cases — especially when a senior or other taxpayer experienced a major change last year — consulting a Certified Public Account or other tax professional may result in a nice refund or prevent penalties and interest for filing an incorrect return.

Jamie Dent, a Certified Public Accountant for 11 years, who has an office at 922 Porter Ave. in Ocean Springs, said he’s seen several instances when seniors should forgo the free service and get the help of a CPA.

They include:

▪ If the taxpayer sold of an asset such as stock or a property and has capital gains, especially when the asset has a cost basis that isn’t clear. “I think that needs a professional look over,” he said. It also spreads the risk to someone who understands the risk of being wrong. “You need somebody watching your back,” he said, and someone who will represent you with the IRS, which is very daunting to a taxpayer. “Dealing with IRS is very routine for us,” he said.

▪ When there are any changes to retirement or pensions, such as when a person withdraws more than what is required. There are ways to work that and eliminate some of the tax, Dent said. It’s especially important to seek professional guidance when a person has a mix of retirement accounts, he said, both deferred income and already taxed contributions. They need someone who understands what is taxable and non-taxable, he said.

▪ Following the loss of a spouse, “There are a lot of trip wires,” he said. When the surviving spouse inherits an IRA account, there can be issues that determine whether the funds can transfer as a complete withdrawal or if another retirement account needs to be created. If the spouse who died owned a business, it’s decidedly more complicated and requires professional help, he said.

▪ In the case of high medical costs, there may be some advantages to consulting a CPA, he said. The Tax Cuts and Jobs Act passed by Congress in late December changes regulations.

Dent said he cringes when he hears people talk about tax returns that are easy and straight forward. “Nothing about tax code is easy and straight forward,” he said, and the new tax law comes with 800 pages of regulations to digest.

Volunteer tax preparers need to be aware of where their limits are, he said. In one case the volunteer told a woman who had relied on free tax preparation that they weren’t comfortable doing her taxes that year and suggested she get help.

“She dropped in, and we took care of her,” Dent said. She had a land transaction and the cost basis was cloudy, he said. He got her an enhanced refund.

If he looks over financial documents and comes to the conclusion a straight-forward tax return can be filed, Dent said he would tell the person to take advantage of the free or low-cost service and invite them back if anything changes.

“We like long term relationships with our clients,” he said of CPAs. He can be contacted at 228-875-7816.

He also encourages seniors and all taxpayers to start preparing their tax returns early, in part due to the risk of fraudulent tax returns that use the victims’ personal information to file fraudulent tax returns electronically and claim bogus refunds.

“This is usually done early in the tax filing season. When the real taxpayers file, they’re notified that they’re attempting to file duplicate returns,” he said. The IRS notifies the taxpayer the return is rejected because one with the same Social Security number already has been filed for the same year.

“The IRS then must determine who the legitimate taxpayer is,” he said, which can cause major complications and delay a refund.

But if a person needs extra time this year, they shouldn’t be afraid to file for an extension, he said.

“Take your time, do it right,” he said.