Skip to main content
You have permission to edit this article.
Edit
Interactive Tax Assistant 101

Interactive Tax Assistant 101

  • 0

MoneyTips

Since 2010, the Internal Revenue Service (IRS) budget has been cut by roughly 20%, and it now has 22% fewer employees than it did in 2010, making IRS customer service challenging, to say the least. The IRS subjected 8.8 million taxpayers to "courtesy disconnects" through the 2015 tax-filing season that ended in mid-2016. "Courtesy disconnects" are a euphemism for hanging up on taxpayers after a prolonged hold time. In the previous tax year, there were “only” 544,000 courtesy disconnects.

Even if a taxpayer managed to get through, he or she wasted lots of precious time just waiting to speak to an IRS representative. In the 2020 fiscal year, IRS received more than 100 million calls on its toll-free telephone lines, but only about 24 million were answered by IRS employees. Taxpayers who got through had to wait an average of 18 minutes on hold. A report from the office of the National Taxpayer Advocate blamed budget cuts, outdated information technology, and insufficient staffing for the decline in customer service.

Fortunately, the IRS has many other methods and resources that can handle the more common questions without having to waste almost an hour of your life waiting to speak to an IRS representative. One of the more useful resources is the IRS Interactive Tax Assistant (ITA). ITA is an interactive online assistant that can help you with many questions regarding tax law.

Once you search for a topic, ITA will respond and ask a series of questions that leads you to the answers that you are looking for. Answer the initial questions and use the "Continue" button to move forward to the next question screen, based on your responses. After the final response is generated, you can choose to print out the entire interview and/or the final response. Note: Do not use your browser's "back" button with ITA; it can cause a system error that will require you to exit and start a new session.

There is a separate list of topics on the ITA website that lists some of the more common questions such as "What is the Simplest Form to Use to File My Taxes?" and "Can I Deduct My Mortgage-Related Expenses?" You can choose to use the links on that list if one of the topics fits your situation.

In the event the ITA cannot address your question, you could be sent to the Tax Trails application at IRS.gov. It will direct you to other resources that can address your concerns.

The ITA assumes that you are a U.S. citizen or resident alien and have been so for the entire tax year in question. If you are married, your spouse must also meet the same criteria. Otherwise, the advice you get from the site may not apply. Look up IRS Publication 519, "U.S. Tax Guide for Aliens," for assistance in that case.

Keep in mind that the answers on the ITA should not be considered as written advice to any specific request of yours, as defined in the tax code. See the disclaimer on the ITA website for details. In other words, it is best for you to verify the answer to your question within other IRS sources later, because the ITA response would not hold up in court in case of a dispute about the advice provided.

If you do not mind multi-tasking while you are on the phone or simply would rather talk to a person regarding your tax issue, good luck getting the IRS on the phone. However, we suggest trying the ITA program first. You may be able to get your answer in a much shorter time and free up an IRS agent to solve somebody else's more complex problem. It's a win-win situation for everybody. Now, what will you do with the extra half-hour in your life?

Failing to pay your taxes or a penalty you owe could negatively impact your credit score. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.


Photo by Anna Shvets from Pexels

Advertising Disclosure

Originally Posted at: https://www.moneytips.com/interactive-tax-assistant-101

5 Reasons To File Your Tax Return Now

Itemize Or Take The Standard Deduction On Your Federal Income Tax?

What are Deductions, Credits, and Exemptions?

The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

MoneyTips

Procrastinator alert: your taxes are due! If you are nowhere near ready as the scary deadline approaches, you may file an extension with the IRS that gives you up to six more months to file your taxes. Filing an extension will spare you from late filing penalties — 5% of the amount of tax you owe for each month or partial month past the deadline. The extension is automatic — you do not have to send any justification or reasoning like "I have 5,000 wadded-up receipts crammed in a shoebox."

The IRS and Treasury Department have extended the 2021 tax filing and payment deadline from April 15th to May 17th, due to the COVID-19 pandemic.

To file an extension, fill out IRS Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Tax Return" and submi...

The Punishing Costs of Paying Your Taxes Late

Last-Minute Tax Day Filing

You Owe Taxes, But Can’t Pay the Bill

MoneyTips

Contributing to a retirement account can be difficult for lower income households, but one can argue that it is even more important for those families to take advantage of all the retirement savings options that are possible. One of the lesser-known options applies directly to lower-income families – the credit for qualified retirement savings contributions, also known as the Saver's Credit. Note that this program is a tax credit and not a deduction, meaning that the amount you qualify for is subtracted directly from the taxes that you owe.

The credit applies to most retirement plans – 401(k)s, IRAs (both Roth and traditional), 403(b)s, 457(b)s, SIMPLE IRAs, SARSEPs, and other plans. It does not apply to rollover contributions, and any recent distributions that you received from these plans can reduce the amount of your credit. As of 2018, you may also take the credit for contributions to an Achi...

Only 25% Of Americans Know This Simple Tax-Savings Trick

It's STILL Not Too Late To Lower Your Tax Bill

Traditional vs. Roth IRAs and 401(k)s

MoneyTips

Waiting until the last minute to pay your taxes can cost you if you are expecting a refund, since the government hangs on to your money and receives more interest on it. However, if you owe money to the government, that same principle applies to you. Why not wait until the last minute?

There is no reason not to, as long as your return is postmarked or electronically submitted by May 17th, 2021, and your payments are submitted then as well. Extending your deadline to file does not extend your payment time. You are expected to pay the amount you owe, or your best estimate, by the May 17th deadline.

"Filing for an extension doesn't get you an extension to pay," confirms Betterment Head of Tax Eric Bronnenkant. "Let's say you don't pay by the deadline, well then you're still going to have to pay interest on that m...

Should You Pay Your Taxes With A Credit Card?

The Punishing Costs of Paying Your Taxes Late

You Owe Taxes, But Can’t Pay the Bill

MoneyTips

Wouldn't it be nice if you could deduct your credit card debt from your taxes? For most Americans, that's just a dream that will never come true. However, some circumstances allow you to deduct some credit card debt – all related to using your card for business purposes.

The 2017 Tax Cuts and Jobs Act raised the standard deduction and eliminated or reduced certain itemized deductions as part of a tax simplification effort. It's critical for those who still itemize to take advantage of all possible deductions. Self-employed taxpayers and small business owners who rely heavily on credit cards may be able to save by taking advantage of credit-related deductions.

Credit card debt on personal purchases is not tax-deductible, thanks to the 1986 Tax Reform Act. However, three varieties of business-related credit card debt may be deductible.

Interest on credit ca...

How To Save For Taxes If You Are A Freelancer

Top 10 Home Office Tax Deductions

Don't Let Taxes Kill Your New Business

Get up-to-the-minute news sent straight to your device.

Topics