ElderWeb

Since it's tax season, it's good to note some IRS guides that may help
seniors and their family members with tax preparation.

The IRS has authorized online payments of amounts due with federal 1040 tax returns, 1040ES Estimated Payments, and Form 4868 extensions of time to file tax returns, effective January 12, 2001. Taxpayers filing 2000 tax returns in the spring of 2001 will be the first to take advantage of this new tax payment option. An Internet site, www.officialpayments.com will host the payment operation which has been sanctioned by the IRS.

All tax return filers are eligible to use the payment Web site, which can accessed from all computers, including home computers, business computers, and public computers such as those found at libraries. Taxpayers must have a credit card to use this service. Payments can be made using an American Express, MasterCard, or Discovery Card.

Some states are participating in this program as well. Payments for state taxes for the following states: may also be made using your credit card at the official payments Web site: California, Connecticut, Illinois, Maryland, Minnesota, New Jersey, Oklahoma, and Washington DC.

Although this may be a very handy option for some taxpayers, be sure to check out the fee schedule before using this service. Fees are based on the amount of tax owed and are different for federal and state payments. People who pay $1,000 in federal taxes online will be charged a fee of $35, and the fee to pay $1,000 in state taxes is about $35 in most states. However, fees can be as low as $1 for small tax bills and can be thousands dollars for large ones.

An excerpt from Frequently Asked Questions on the Social Security Administration (SSA) Web site:

Q. I got a retroactive benefit. This means I will have an income higher than I expected and may have to pay more income taxes. Will some taxes automatically be withheld from my Social Security benefits?

A. Generally, taxes won't automatically be withheld from your monthly benefits to pay taxes on your higher income. If you think you may have to pay additional taxes this year, you can have additional taxes withheld from your paycheck. Or you can request that taxes be withheld from your Social Security benefit by completing an IRS W-4V and returning it to your local Social Security office by mail or in person.

Q. Now that I'm going to receive monthly Social Security benefits while working, will my benefits be reported to the Internal Revenue Service?

A. Yes. Your Social Security benefits will be reported to the Internal Revenue Service each year. Each January, we will send you a form 1099 that tells you how much in benefits we have reported to the IRS.

The BBC reports that the British government is trying to change retirement rules to prevent Britains under age 55 from retiring. Currently, people with occupational or private pensions are given tax breaks if they take early retirement after 50. The government is said to be planning to increase to 55 the age at which the tax help comes into effect.

Social Security Secretary Alistair Darling will soon announce the findings of a report titled "Winning the Generation Game." A report from Downing Street's Performance and Innovation Unit referred to in the paper shows that 2.8 million people aged between 50 and 65 are not working, costing the government £16 billion every year. Ministers believe some of that money could be recouped if the trend towards earlier retirement were halted.