|Updated: 1/19/2012 5:24 pm
||Published: 1/19/2012 4:27 pm
LITTLE ROCK, AR - More than 300,000 Arkansans pulled a very important postcard out of their mailbox. It explains a mistake on page 22 of the Arkansas Individual Income Tax booklet -- that already cost you money.
"We screwed up and we felt it was our place to fix it," said Arkansas Department of Finance and Administration Director Richard Weiss.
The fix though - the postcards - cost more than $70,000 to print and send. That's taxpayer money.
Here's the problem with the book: the deduction limit for a section 179 expense is listed as $133,000. It's actually $25,000. So let's say the people who use section 179, primarily small business owners, didn't get or just missed the postcard in the mail. Arkansas Select Tax Service Owner Jim Williams says, "that could be catastrophic."
Here's why: let's say you want to buy a tractor for your business that costs $80,000. Using the incorrect $133,000 deductible you would be able to write the whole thing off. However, using the correct $25,000 deductible figure, you would still owe the state an extra $55,000.
"I promise you," said Williams, "the state of Arkansas is not gonna say 'well because we misprinted it, it's ok.' It's not how it works."
So to sum it up, you already paid for the postcards, you could pay for a deductible you thought you had but didn't, and if that is the case -- it could get even worse.
According to Williams, "the insult to injury is they'll tell you you owe penalties and interest on that too."
Here's some good news for a lot of taxpayers though: you only have to worry about the misprint if you file your taxes on paper. On-line tax forms are correct.
The $70,000 for the postcards comes out of the Department of Finance and Administration budget, which is about $90 million total. The Department of Finance and Administration says the mistake happened because they actually printed last year's numbers, instead of this year's. Tax professionals told the state about the misprint.