13 WTHREconomic pinch more painful on tax day

Economic pinch more painful on tax day

Indianapolis - This year, April 15th is even more taxing for many Indiana families. Lost jobs and lost homes may force many people to take special action before filing their taxes.

On this national day of dread for many Americans, it was business as usual for Julia Ndaiye. The owner of the Oil Palace at Lafayette Square Mall needed more time to file her federal tax return, and took it.

"I went ahead and filed my extension and got my paperwork in, so I'm just now getting the bulk of everything done," said Ndaiye, who sells essential oils and perfumes.

The economy has taken its toll on her startup business. She assumes she'll owe money to the government. That assumption, and getting her documents together, meant she wanted to take her time - something she may not have needed if the cash flow were better.

"I think they weigh wants versus needs and decide they need to eat versus smell good," Ndaiye.

Indianapolis area accountants haven't reported a surge in extensions, but say for some taxpayers, it's a must.

"It doesn't mean you're going to be relieved of paying your money. If you don't pay, you're gonna get interest on it," said Barnes.

The upshot here is if you need more time, take more time. But you still have to file the necessary paperwork. If you don't, tax time becomes penalty time.

"I had a client last year who didn't do that extension, and she got fined $2,000," said Barnes.

While some were filing, others were dumping. Reminiscent of the Boston Tea Party tax revolt in 1773, protesters took a different tack on taxes - or more precisely, on bailouts and buybacks.

"This is not about taxes. This is not about taxes or health insurance, it's about the sovereignty of our country. We don't ever want to lose that," said one protester.

Some protesters talked about wanting more power in the hands of local or state government, while protesters in other states focused on issues like gun control.

As in protests around the country Wednesday, demonstrators in Lafayette poured tea bags into the Wabash River, sparking debate on both sides.

"When we protested the war, they yelled at us to get a job and yet here they are in the middle of the week out here. Where are their jobs? They probably lost them, but the government spending is going to help that," said Desiree McCloud, Purdue student.

A similar protest attracted thousands to the Indiana Statehouse lawn Wednesday afternoon.

Meantime, it could take a while before Indiana taxpayers are able to pay their state taxes online. The state's ePay system has been slow going for several days.

Officials say ePay is experiencing a historically high volume of tax payments. The increased traffic is happening because a large number of taxpayers throughout the state have waited to pay their taxes. Officials with Indiana Department of Revenue say they're continuing to work on the problem.

Call 317.232.2240 for tech support. You can also pay by phone at 1.866.729.4682 (option 1).

If a taxpayer discovers an error after filing their return, they will need to complete an amended return. This cannot be done electronically at this point in time. It must be done via paper form. If the taxpayer amends the return and discovers he/she owes more than originally paid, the difference will due. If this amount is paid after the filing date, penalty and interest will be due on the difference (per state law).

Penalty - 10 percent of the tax liability (debt due.)
Interest - 7 percent of the tax liability (debt due, compounded daily.)