The new trend on Tax Day this year can be described in one word: freebies. Filers reportedly will be rewarded at countless businesses across the nation with free cookies, free massages and even free shredding at Office Depot outlets.
Customers of California Tortilla, for example, can get free chips and dip if they tell their servers the secret passwords: "Taxes Shmaxes."
The catch? There are no California Tortilla outlets in California. Most are in Virginia.
A second trend is less rewarding — at least for procrastinators. Because of the increase of online filing and the high cost of paying postal workers overtime, none of the post offices in Sonoma County will be staying open after hours today to collect returns.
If you want to get that April 15 postmark, you must mail your return by the end of regular business hours, which for the downtown Santa Rosa branch is 6:30 p.m. For the downtown Petaluma post office, closing time is 6 p.m. After that, filers will have to drive to San Francisco, where the post office at 300 Evans Ave. will collect stamped mail until 10 p.m.
Finally, there's a more taxing issue that may come as a surprise to some Californians this year — the possibility of having to pay taxes on any mortgage relief they may have received from their banks.
Seven years ago, Congress passed legislation giving homeowners relief from having to pay taxes on the amount of a loan that was forgiven during a "short sale" of their home.
But that tax break expired at the end of December, and Congress has yet to come to agreement on extending that benefit to those who found mortgage relief last year.
As a result, some current and former homeowners could be blindsided by a hefty tax bill — at a time when they may still be struggling to get back on their feet financially.
According to an analysis by the Urban Institute, roughly 2 million current or former homeowners are at risk of getting stung by this tax liability. If Congress fails to renew the Mortgage Forgiveness Debt Relief Act, borrowers are expected to be on the hook for $5.4 billion in extra taxes.
This could have a chilling effect both on the rebounding housing market and on the willingness of owners of distressed properties to seek relief on their mortgages.
Some filers are finding other unhappy surprises as they sign their tax forms and write out checks this year. Many are finding their after-tax incomes smaller than in previous years due to factors such as expiring tax credits, rising housing prices, increasing health care costs and flat or declining personal incomes.
Congress would do well to remember that although there are signs of economic recovery everywhere — including in what's headed for the Internal Revenue Service in today's mail — many Americans have yet to recover from the most significant economic downturn since the Great Depression. Lawmakers can demonstrate their understanding by renewing the Mortgage Forgiveness Debt Relief Act and giving former homeowners a break from having to pay taxes on income that never really existed in the first place.
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