6 things you need to know about before filling your taxes this year

If you’re among the 20 percent of taxpayers who have yet to file their federal income tax, you are

most likely overwhelmed with questions, preoccupied with how much you owe – or both.

An unlikely “friend” can help – the Internal Revenue Service itself. Their website offers a great deal of information on all things income tax related.

We sorted trough their most frequently asked questions and found six things you need to know or should ask your tax preparer about.

Extensions - You can get an automatic six-month extension to file, until October 15. But – this extension does not give you more time to pay any taxes due. If you have not paid at least 90 percent of the total tax due by April 15, you could be subject to an estimated tax penalty. Use Form 4868 to file an extension.

More taxes than money - If you cannot pay the full amount of taxes you owe by the April 15 deadline, you should file your return and pay as much as you can. Contact the IRS at 800-829- 1040 to discuss payment options, such as an installment agreement or an offer in compromise.

You can also apply for installment payments online. More than 75 percent of taxpayers eligible for an installment agreement can apply using the online payment agreement at www.IRS.gov. Find out more about this simple process by typing “online payment agreement” in the search box on the IRS. gov homepage.

Dependents - You can claim grown children, elderly parents, unemployed brother or other relatives as dependents as long as they live with you full time and you provide half their support. You may also claim non-family members who live with you full time and relatives you support who don’t live with you. The worksheet on calculating such de- pendents’ support costs, including figuring their rent in your house, annual utility costs, food and other related expenses is time-consuming, but it may be worth a $3,650 deduction. See IRS publication 501 at www.irs.gov.

Unemployment benefits - These benefits are taxable – as is severance pay from a former employer and any additional payments you might have received for unused sick pay or vacation. But you do get a bit of tax break on your unemployment payments: the first $2,400 you received in 2009 is excluded, so you don’t pay taxes on it.

Homebuyer credits - Nationally, through mid-February, nearly 1.8 million Americans had filed returns to collect $12.6 billion in tax credits for homes they bought in 2008 and 2009.

The tax credit deadline for having a binding contract to buy a home is April 30 of this year. The deal must close by June 30.

The first-time homebuyer credit, worth up to $8,000, is for those who have never owned a home or have not owned a home in three years. Legislation last year expanded the credit to include those who lived in a house for a five-year period out of eight years and who buy a new main home after Nov. 6, 2009. This credit isn’t as large – the maximum is $6,500.

E-file - Electronically filing guides you through the filing process by asking you questions and helping you check for deductions and credits you might otherwise miss. It also provides for quicker refunds. The average federal refund so far this year is $3,036, up $266 from a year ago. If you owe tax, you can pay by credit card using e-file, although fees do apply.

Free tax forms and software are available through the IRS website. Major software preparers also have free software on their websites.