Consumer Credit Counseling Service of Los Angeles Offers Tips To Avoid Common Income Tax Headaches.

LOS ANGELES--(BUSINESS WIRE)--March 8, 1999--If you're like many Americans, you have procrastinated about as long as you can, and you're now ready to sit down with your pile of forms and receipts, and tackle your income taxes.

Or you've just finished and are completely exhausted, but still realize you could plan better for next year. Gary Stroth, executive director of Consumer Credit Counseling Service of Los Angeles (CCCS-LA), offers several simple tips for reducing stress by simplifying the tax filing process.

"While doing your federal income tax return is time-consuming and a bit intimidating, much of the agony is self-inflicted," explained Stroth. "For most people, all it takes is a little planning and organization throughout the year to prevent the annual tax drudgery every April. If you play your cards right, you could save yourself a lot of money." For people who believe they owe taxes:

-- Begin your taxes early. Calculate how much you will owe as soon

as possible so you can begin saving for the payment. Filing on

time will enable you to avoid the penalty for filing late.

-- Start saving immediately. Cut back on unnecessary expenses such

as those for entertainment and dining at restaurants. Instead of

a costly spring vacation, consider low cost activities closer to

home. Consider spring cleaning and holding a garage sale. It's

not too painful to save $100 over two weeks for a month or two.

-- If you still can't pay, schedule an appointment with a CCCS-LA

counselor. We offer a tax advocacy program that can help you work

out a repayment plan with the IRS. Once we review your budget and

living expenses, we can develop an installment agreement which

the IRS examines for its approval. While overdue taxes are

subject to interest and penalties, your counselor will address

the cause of your tax liability and show you how to avoid

problems in the future.

-- If you can't pay with savings and decide to pay with a loan, you

will have the added cost of interest, so shop for the lowest rate

possible.

-- To avoid owing a lump sum again next year, see your employer's

payroll or human resources manager to increase your withholding

amount for your W-4 immediately.

-- Avoid the temptation to pay tax bills with your credit card. With

this newest payment option, in addition to high interest,

taxpayers will be charged a fluctuating "convenience fee."

On the other hand, if you are due a refund, Stroth advises the following:

-- If you're getting a refund of more than $100, you might want to

reduce your withholding amount. Tax refunds are not as good as

they seem because, in reality, you've just extended an

interest-free loan to the federal government. The money works for

you better if it's earning interest in a savings account,

certificate of deposit or an IRA or even used to pay down high

credit card debts.

-- Make the most of large refunds. Rather than splurging on a big

ticket consumer item, take advantage of this rare opportunity to

create an emergency fund, reduce credit card debt, set aside the

money for large annual expenses such as property taxes and

insurance or start a college fund for your child.

"We've seen repeatedly that the majority of our clients view income tax refunds as a bonus-money perfect for extras such as a new stereo, wardrobe or summer vacation," Stroth said. "One common situation among our clients in financial crisis is that, prior to getting in debt, they have not established a savings for emergencies and instead had relied on their credit cards."

Established in 1966, Consumer Credit Counseling Service of Los Angeles is a non-profit organization dedicated to helping members of the public learn how to prevent and solve financial difficulties. The group offers professional programs including consumer credit education, confidential individual counseling and the implementation of debt reduction plans.

With headquarters in Commerce, CCCS-LA counseling offices are also located in Palmdale, Pasadena, Pomona, Long Beach, Tarzana, West Covina, Torrance, Santa Monica, Burbank, South Central Los Angeles, Culver City, Santa Clarita, Cerritos, Granada Hills and Mid-Wilshire. Appointments for free, confidential, debt counseling sessions in person or by phone can made by calling 800/750-2227. No-cost internet counseling is also available at cccsla.org.