You may be missing out on tax deductions
Advertiser Staff
Hawai'i taxpayers are leaving money on the table when it comes to federal tax returns because they aren't filing for certain credits and refunds.
The Internal Revenue Service estimates that more than 102,000 people in the state are eligible for the earned income tax credit, which is a credit available to low- and moderate-income taxpayers. It can be worth up to $4,536, depending on income and family status.
The IRS said last year the number of people who claimed the EITC totaled 81,782.
The Telephone Excise Tax Refund, which is only available this year, also isn't being sought by everyone, the tax agency said.
Only about 70 percent of Hawai'i residents filing returns so far have claimed the credit, which is a one-time refund of long-distance excise taxes billed between March 2003 and July 2006. There's a standard refund available ranging between $30 and $60 under the credit, or taxpayers can calculate the tax refund by tallying the amount of the tax they paid.
The IRS said the 30 percent of Hawai'i returns that haven't claimed the refund have missed out on an estimated $1.84 million.
The tax authority also noted that more people could use its free online tax filing system if they made $52,000 or less.
The electronic filing system is available on the irs.gov site by clicking on the Free File link. Among the 424,000 Hawai'i residents who were eligible to use the system last year, only 13,166 did so, the IRS said.
The agency also announced it is looking for Hawai'i residents to join its Taxpayer Advocacy Panel, which allows people from each state to identify issues and make recommendations. Applicants need to be current with their tax obligations and be willing to spend 300 hours to 500 hours on the panel during a year's time.
Those who are interested should call (888) 912-1227 or apply online at www.improveirs.org.