WILL THE AMT DELAY YOUR REFUND?
This year, some early filers may have to wait a few extra weeks for their refunds. The delay is due to the Alternative Minimum Tax (AMT) legislation enacted in December.
Most tax filers will not be affected by the AMT legislation. The delays in processing and refunds will be experienced only by those who include any of the following five forms with their 2007 individual income tax return:
* Form 8863, Education Credits.
* Form 5695, Residential Energy Credits.
* Schedule 2 (Form 1040A), Child and Dependent Care Expenses for Form 1040A Filers.
* Form 8396, Mortgage Interest Credit.
* Form 8859, District of Columbia First-Time Homebuyer Credit
If you are filing using one of the five affected forms you won’t be able to send your return to the IRS for a few weeks until the IRS computers are reprogrammed for the late tax law change. The IRS expects to be ready for these returns by February 11.
Even if you are affected, you should remember that it is always a good idea to start working on your tax return sooner rather than later.
Filing electronically is the best option for everyone, including people impacted by the AMT changes. Whether or not your return claims an AMT related credit, filing electronically results in faster refunds and fewer errors. When you e-file combined with direct deposit you can expect your refund in as little as 10 days. Refunds from paper returns typically take four to six weeks.
For the latest information on the AMT, e-file, direct deposit and other tax matters visit the IRS website at IRS.gov.
Don't be confused by internet sites that end in “com”, “net”, “org” or any other designations. Remember, for the official IRS Web site be sure to use IRS.gov.
Links:
* Alternative Minimum Tax (AMT) - How it Affects Filing Season 2008 -- http://contentmgmt01.irs.gov:443/newsroom/article/0,,id=176605,00.html
* Forms & Publications -- http://contentmgmt01.irs.gov:443/formspubs/index.html
* 1040 Central -- http://contentmgmt01.irs.gov:443/individuals/article/0,,id=118506,00.html
Monday, January 7, 2008
Friday, January 4, 2008
IR-2008-002: Treasury and IRS Give Taxpayers Greater Control over Information Held by Tax Preparers; Propose Marketing Restrictions on RALs
Treasury and IRS Give Taxpayers Greater Control over Information Held by Tax Preparers; Propose Marketing Restrictions on RALs
WASHINGTON — The Treasury Department and the Internal Revenue Service today released final regulations and a related revenue procedure giving taxpayers greater protection and control over their tax return information held by tax return preparers. Treasury and the IRS also issued a separate request for public comment on a proposal to restrict the marketing of refund anticipation loans and similar products.
The final rules update disclosure and privacy laws related to preparers for the first time in more than 30 years and bring taxpayer consent requirements into the electronic age. Preparers will have until Jan. 1, 2009 to implement the new consent requirements, giving preparers a full year to make any necessary changes.
The final rules apply to Code section 7216 and a related provision of the Code, section 6713, which provide penalties against tax return preparers who make unauthorized use or disclosure of tax return information. Regulations published in 1974 provide certain exceptions to the penalties in cases of taxpayer consent. However, the 1974 regulations did not address issues raised by electronic preparation and filing of tax returns. Currently, 57 percent of all individual taxpayers file their tax returns electronically.
The final rules affirm a general rule in place for more than three decades that taxpayers, not the IRS, control their own tax return information held by preparers and, within appropriate limits and safeguards, taxpayers are able to direct preparers to disclose tax return information as taxpayers see fit. More than 60 percent of individual taxpayers use a preparer.
Federal law already strictly prohibits the IRS from making disclosures of taxpayer return information within its control to third parties except with taxpayer consent or in circumstances set by Congress. The final rules have no effect on the strict protection of return information in the IRS’s hands and apply only to tax return information held by income tax return preparers.
Among the new rules:
Generally, preparers must obtain taxpayer consent, either by paper or electronically depending on how the return is being filed, before tax return information can be disclosed to any third party or used for any purpose other than filing the return.
If the taxpayer consents to the disclosure and use of his information, the consent must identify the intended purpose of the disclosure, identify the recipients and describe the particular authorized disclosure or use of the information.
Mandatory language informs individual taxpayers that they are not required to sign the consent; that if they sign the consent, federal law may not protect their information from further disclosure; and that if they sign the consent, they can set a time period for the duration of that consent. If taxpayers fail to set a time period, the consent is valid for a maximum of one year.
To prevent consent requests from individual taxpayers from bring buried in fine print, the rules require the paper consent documents to be in 12-point type on 81/2 by 11 inch paper and require electronic consent requests to be in the same type as the Web site’s standard text, all to prevent consent requests from being too difficult to read for individual taxpayers.
If a taxpayer declines to provide consent for an unrelated tax preparation disclosure or use request, the preparer cannot make a similar consent request. The intent is to protect taxpayers from being pressured with repeated consent requests regarding the same issue.
Mandatory consent from taxpayers also is required if the tax information is going to be disclosed to a tax preparer located outside the United States. This provision is intended to ensure taxpayers are informed if their tax information is being sent off-shore for return preparation. The individual taxpayer’s Social Security Number also must be redacted.
Proposed regulations under section 7216 were the subject of many public comments during the comment period in late 2005 and early 2006. The final regulations summarize many of the comments and explain how these comments were addressed.
One issue that was raised during the comment period was the use by tax return preparers of tax return information to market Refund Anticipation Loans (RALs) to taxpayers. The issue of marketing RALs and similar products, such as Refund Anticipation Checks and Audit Insurance, was not specifically addressed in the proposed regulations.
The Treasury Department and the IRS are concerned that RALs and similar products may provide preparers with a financial incentive to take improper tax return positions in order to inflate refund claims inappropriately. In order to give the public an opportunity to comment on this issue, the Treasury Department and the IRS are issuing an Advance Notice of Proposed Rulemaking (ANPRM) that announces they are considering a proposal that tax return preparers be prohibited from disclosing or using taxpayer return information for the purpose of selling products such as RALs and similar products.
The ANPRM has a 90-day written comment period after the publication in the Federal Register. Thereafter, the Treasury Department and the IRS will consider what steps, if any, to take with respect to RALs and similar products.
Related Items:
* TD 9375: This document contains regulations to update the rules regarding the disclosure and use of tax return information by tax return preparers. Among other things, the regulations finalize rules for taxpayers to consent to the disclosure or use of their tax return information by tax return preparers.
* Rev. Proc. 2008-12: This revenue procedure provides guidance to tax return preparers regarding the format and content of consents to disclose and consents to use tax return information with respect to taxpayers filing a return in the Form 1040 series, e.g., Form 1040, Form 1040NR, Form 1040A, or Form 1040EZ, under section 301.7216-3 of the Regulations on Procedure and Administration (26 CFR Part 301). This revenue procedure also provides specific requirements for electronic signatures when a taxpayer executes an electronic consent to the disclosure or use of the taxpayer’s tax return information.
* Reg. 136596-07: This document describes rules that the Treasury Department and the IRS are considering proposing, in a notice of proposed rulemaking, regarding the disclosure and use of tax return information by tax return preparers. The rules would apply to the marketing of refund anticipation loans (RALs) and certain other products in connection with the preparation of a tax return and, as an exception to the general principle that taxpayers should have control over their tax return information that is reflected in final regulations published in T.D. 9375.
* FAQs Related to Strengthened Taxpayer Control Over Tax Information
WASHINGTON — The Treasury Department and the Internal Revenue Service today released final regulations and a related revenue procedure giving taxpayers greater protection and control over their tax return information held by tax return preparers. Treasury and the IRS also issued a separate request for public comment on a proposal to restrict the marketing of refund anticipation loans and similar products.
The final rules update disclosure and privacy laws related to preparers for the first time in more than 30 years and bring taxpayer consent requirements into the electronic age. Preparers will have until Jan. 1, 2009 to implement the new consent requirements, giving preparers a full year to make any necessary changes.
The final rules apply to Code section 7216 and a related provision of the Code, section 6713, which provide penalties against tax return preparers who make unauthorized use or disclosure of tax return information. Regulations published in 1974 provide certain exceptions to the penalties in cases of taxpayer consent. However, the 1974 regulations did not address issues raised by electronic preparation and filing of tax returns. Currently, 57 percent of all individual taxpayers file their tax returns electronically.
The final rules affirm a general rule in place for more than three decades that taxpayers, not the IRS, control their own tax return information held by preparers and, within appropriate limits and safeguards, taxpayers are able to direct preparers to disclose tax return information as taxpayers see fit. More than 60 percent of individual taxpayers use a preparer.
Federal law already strictly prohibits the IRS from making disclosures of taxpayer return information within its control to third parties except with taxpayer consent or in circumstances set by Congress. The final rules have no effect on the strict protection of return information in the IRS’s hands and apply only to tax return information held by income tax return preparers.
Among the new rules:
Generally, preparers must obtain taxpayer consent, either by paper or electronically depending on how the return is being filed, before tax return information can be disclosed to any third party or used for any purpose other than filing the return.
If the taxpayer consents to the disclosure and use of his information, the consent must identify the intended purpose of the disclosure, identify the recipients and describe the particular authorized disclosure or use of the information.
Mandatory language informs individual taxpayers that they are not required to sign the consent; that if they sign the consent, federal law may not protect their information from further disclosure; and that if they sign the consent, they can set a time period for the duration of that consent. If taxpayers fail to set a time period, the consent is valid for a maximum of one year.
To prevent consent requests from individual taxpayers from bring buried in fine print, the rules require the paper consent documents to be in 12-point type on 81/2 by 11 inch paper and require electronic consent requests to be in the same type as the Web site’s standard text, all to prevent consent requests from being too difficult to read for individual taxpayers.
If a taxpayer declines to provide consent for an unrelated tax preparation disclosure or use request, the preparer cannot make a similar consent request. The intent is to protect taxpayers from being pressured with repeated consent requests regarding the same issue.
Mandatory consent from taxpayers also is required if the tax information is going to be disclosed to a tax preparer located outside the United States. This provision is intended to ensure taxpayers are informed if their tax information is being sent off-shore for return preparation. The individual taxpayer’s Social Security Number also must be redacted.
Proposed regulations under section 7216 were the subject of many public comments during the comment period in late 2005 and early 2006. The final regulations summarize many of the comments and explain how these comments were addressed.
One issue that was raised during the comment period was the use by tax return preparers of tax return information to market Refund Anticipation Loans (RALs) to taxpayers. The issue of marketing RALs and similar products, such as Refund Anticipation Checks and Audit Insurance, was not specifically addressed in the proposed regulations.
The Treasury Department and the IRS are concerned that RALs and similar products may provide preparers with a financial incentive to take improper tax return positions in order to inflate refund claims inappropriately. In order to give the public an opportunity to comment on this issue, the Treasury Department and the IRS are issuing an Advance Notice of Proposed Rulemaking (ANPRM) that announces they are considering a proposal that tax return preparers be prohibited from disclosing or using taxpayer return information for the purpose of selling products such as RALs and similar products.
The ANPRM has a 90-day written comment period after the publication in the Federal Register. Thereafter, the Treasury Department and the IRS will consider what steps, if any, to take with respect to RALs and similar products.
Related Items:
* TD 9375: This document contains regulations to update the rules regarding the disclosure and use of tax return information by tax return preparers. Among other things, the regulations finalize rules for taxpayers to consent to the disclosure or use of their tax return information by tax return preparers.
* Rev. Proc. 2008-12: This revenue procedure provides guidance to tax return preparers regarding the format and content of consents to disclose and consents to use tax return information with respect to taxpayers filing a return in the Form 1040 series, e.g., Form 1040, Form 1040NR, Form 1040A, or Form 1040EZ, under section 301.7216-3 of the Regulations on Procedure and Administration (26 CFR Part 301). This revenue procedure also provides specific requirements for electronic signatures when a taxpayer executes an electronic consent to the disclosure or use of the taxpayer’s tax return information.
* Reg. 136596-07: This document describes rules that the Treasury Department and the IRS are considering proposing, in a notice of proposed rulemaking, regarding the disclosure and use of tax return information by tax return preparers. The rules would apply to the marketing of refund anticipation loans (RALs) and certain other products in connection with the preparation of a tax return and, as an exception to the general principle that taxpayers should have control over their tax return information that is reflected in final regulations published in T.D. 9375.
* FAQs Related to Strengthened Taxpayer Control Over Tax Information
IR-2008-003: IRS Accepts Integrated Utility Company Issue for Industry Issue Resolution Program
IRS Accepts Integrated Utility Company Issue for Industry Issue Resolution Program
WASHINGTON — The Internal Revenue Service and the Treasury Department today announced that they will work to publish guidance on a method for integrated utilities to use when calculating the tax deduction for domestic production of electricity and natural, as well as other production activities.
The goal is to develop an alternative method that integrated utility companies can use to compute qualified production activities under Internal Revenue Code Section 199(c).
“Providing taxpayers an optional method to comply with a very complex area of the law serves the primary purposes of the Industry Issue Resolution Program (IIR), which provides taxpayers with the guidance that will produce tax certainty and mitigate potential tax controversy,” said Frank Y. Ng, Commissioner of the IRS Large and Mid-Size Business Division.
By selecting the issue for the IIR program, the IRS hopes to clear up concerns about a possible inconsistency among integrated utilities in their approach to computing the deduction for domestic production. To properly compute the section 199 deduction, integrated utility companies are required to determine their domestic production gross receipts, cost of goods sold and direct expenses.
Since its inception in 2000, the IIR program has resulted in resolution of many different tax issues cumulatively affecting thousands of taxpayers in many different lines of business. For each issue selected, a multi-functional team gathers and analyzes the relevant facts and recommends guidance.
At any time, business associations and taxpayers may submit business tax issues that they believe could be resolved through the IIR program. IIR project selection criteria and submission procedures are outlined in Revenue Procedure 2003-36, which is available on the IRS Web site at IRS.gov. The IRS reviews submissions at least semi-annually, with the next review to be on submissions received by March 31, 2008.
Attached is detailed information regarding the issues the IRS considered during its latest review of IIR submissions.
ISSUE SUBMISSIONS FOR THE IIR PROGRAM REVIEWED - SELECTED AS A 2007 IIR PROJECT
Utility Industry
Issue Description: Optional method for calculating domestic production gross receipts, costs of goods sold, or direct expenses for integrated utilities
IRS Contact:
Emile Robertson
Acting, Director, Field Operations, NRC East
Natural Resources and Construction
Phone # 504-558-3239
Submitted by: KPMG LLP
ISSUE SUBMISSIONS FOR THE IIR PROGRAM REVIEWED - NOT SELECTED AS A 2007 IIR PROJECT
Financial Services Industry
Issue Description: 30 Day Grace Period under Regulations Section 31.3406(d)-3 to Provide Certified TINs.
Submitted by: Wachovia Corporation
Estate and Gift
Issue Description: Basis Step Up for Joint Trusts
Submitted by: Investors’ Security Trust Company
Cross Industry
Issue Description: Substantiation requirements for cell phones and other communications equipment
Submitted by: Miller & Chevalier Chartered.
WASHINGTON — The Internal Revenue Service and the Treasury Department today announced that they will work to publish guidance on a method for integrated utilities to use when calculating the tax deduction for domestic production of electricity and natural, as well as other production activities.
The goal is to develop an alternative method that integrated utility companies can use to compute qualified production activities under Internal Revenue Code Section 199(c).
“Providing taxpayers an optional method to comply with a very complex area of the law serves the primary purposes of the Industry Issue Resolution Program (IIR), which provides taxpayers with the guidance that will produce tax certainty and mitigate potential tax controversy,” said Frank Y. Ng, Commissioner of the IRS Large and Mid-Size Business Division.
By selecting the issue for the IIR program, the IRS hopes to clear up concerns about a possible inconsistency among integrated utilities in their approach to computing the deduction for domestic production. To properly compute the section 199 deduction, integrated utility companies are required to determine their domestic production gross receipts, cost of goods sold and direct expenses.
Since its inception in 2000, the IIR program has resulted in resolution of many different tax issues cumulatively affecting thousands of taxpayers in many different lines of business. For each issue selected, a multi-functional team gathers and analyzes the relevant facts and recommends guidance.
At any time, business associations and taxpayers may submit business tax issues that they believe could be resolved through the IIR program. IIR project selection criteria and submission procedures are outlined in Revenue Procedure 2003-36, which is available on the IRS Web site at IRS.gov. The IRS reviews submissions at least semi-annually, with the next review to be on submissions received by March 31, 2008.
Attached is detailed information regarding the issues the IRS considered during its latest review of IIR submissions.
ISSUE SUBMISSIONS FOR THE IIR PROGRAM REVIEWED - SELECTED AS A 2007 IIR PROJECT
Utility Industry
Issue Description: Optional method for calculating domestic production gross receipts, costs of goods sold, or direct expenses for integrated utilities
IRS Contact:
Emile Robertson
Acting, Director, Field Operations, NRC East
Natural Resources and Construction
Phone # 504-558-3239
Submitted by: KPMG LLP
ISSUE SUBMISSIONS FOR THE IIR PROGRAM REVIEWED - NOT SELECTED AS A 2007 IIR PROJECT
Financial Services Industry
Issue Description: 30 Day Grace Period under Regulations Section 31.3406(d)-3 to Provide Certified TINs.
Submitted by: Wachovia Corporation
Estate and Gift
Issue Description: Basis Step Up for Joint Trusts
Submitted by: Investors’ Security Trust Company
Cross Industry
Issue Description: Substantiation requirements for cell phones and other communications equipment
Submitted by: Miller & Chevalier Chartered.
TT-2008-02: SHOULD YOU FILE A TAX RETURN?
SHOULD YOU FILE A TAX RETURN?
You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive.
For example, a married couple both under age 65 generally is not required to file until their joint income reaches $17,500. However self-employed individuals generally must file a tax return if their net income from self employment was at least $400.
Check the “individuals” section of the IRS Web site at IRS.gov or consult the instructions for form 1040, 1040A or 1040EZ for specific details that may affect your need to file a tax return with IRS this year.
Even if you do not have to file, you should file to get money back if Federal Income Tax was withheld from your pay, or you qualify for a refundable credit that may give you a refund even if you do not owe any tax. Refundable credits include:
Earned Income Tax Credit. The Earned Income Tax Credit is a federal income tax credit for eligible low-income workers. The credit reduces the amount of tax an individual owes, and may be returned in the form of a refund.
Additional Child Tax Credit. This credit may be available to you if you have at least one qualifying child and you did not use the full amount of your Child Tax Credit
Health Coverage Tax Credit. Limited to certain individuals who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation.
For more information about filing requirements and your eligibility to receive tax credits, visit the IRS Web site at IRS.gov.
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:
* Forms and Publications -- http://www.irs.gov/formspubs/index.html
* Earned Income Tax Credit -- http://www.irs.gov/individuals/article/0,,id=96406,00.html
* Health Coverage Tax Credit -- http://www.irs.gov/individuals/article/0,,id=109945,00.html
* 1040 Central -- http://www.irs.gov/individuals/article/0,,id=118506,00.html
You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive.
For example, a married couple both under age 65 generally is not required to file until their joint income reaches $17,500. However self-employed individuals generally must file a tax return if their net income from self employment was at least $400.
Check the “individuals” section of the IRS Web site at IRS.gov or consult the instructions for form 1040, 1040A or 1040EZ for specific details that may affect your need to file a tax return with IRS this year.
Even if you do not have to file, you should file to get money back if Federal Income Tax was withheld from your pay, or you qualify for a refundable credit that may give you a refund even if you do not owe any tax. Refundable credits include:
Earned Income Tax Credit. The Earned Income Tax Credit is a federal income tax credit for eligible low-income workers. The credit reduces the amount of tax an individual owes, and may be returned in the form of a refund.
Additional Child Tax Credit. This credit may be available to you if you have at least one qualifying child and you did not use the full amount of your Child Tax Credit
Health Coverage Tax Credit. Limited to certain individuals who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation.
For more information about filing requirements and your eligibility to receive tax credits, visit the IRS Web site at IRS.gov.
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:
* Forms and Publications -- http://www.irs.gov/formspubs/index.html
* Earned Income Tax Credit -- http://www.irs.gov/individuals/article/0,,id=96406,00.html
* Health Coverage Tax Credit -- http://www.irs.gov/individuals/article/0,,id=109945,00.html
* 1040 Central -- http://www.irs.gov/individuals/article/0,,id=118506,00.html
TT-2008-03: CHOOSE YOUR CORRECT FILING STATUS
CHOOSE YOUR CORRECT FILING STATUS
Your federal tax filing status is based on your marital and family situation. It is an important factor in determining whether you must file a return, your standard deduction and your correct amount of tax.
Your marital status on the last day of the year determines your status for the entire year. If more than one filing status applies to you, you may choose the one that gives you the lowest tax obligation.
There are five filing status options:
Single. Generally, if you are unmarried, divorced or legally separated according to your state law, your filing status is Single.
Married Filing Jointly. If you are married, you and your spouse may file a joint return. If your spouse died during the year and you did not remarry, you may still file a joint return with that spouse for the year of death.
Married Filing Separately. Married taxpayers may elect to file separate returns.
Head of Household. You generally must be unmarried and you must have paid more than half the cost of maintaining a home for you and a qualifying person.
Qualifying Widow(er) with Dependent Child. If your spouse died during 2005 or 2006, you have a qualifying child and meet certain other conditions; you may be able to choose this filing status.
For more information about filing status see publication 501, Exemptions, Standard Deduction, and Filing Information available on the IRS website at IRS.gov or by calling 800-TAXFORM (800-829-3676).
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Link:
* Publication 501, Exemptions, Standard Deduction, and Filing Information (PDF 196K) -- http://www.irs.gov/pub/irs-pdf/p501.pdf
Your federal tax filing status is based on your marital and family situation. It is an important factor in determining whether you must file a return, your standard deduction and your correct amount of tax.
Your marital status on the last day of the year determines your status for the entire year. If more than one filing status applies to you, you may choose the one that gives you the lowest tax obligation.
There are five filing status options:
Single. Generally, if you are unmarried, divorced or legally separated according to your state law, your filing status is Single.
Married Filing Jointly. If you are married, you and your spouse may file a joint return. If your spouse died during the year and you did not remarry, you may still file a joint return with that spouse for the year of death.
Married Filing Separately. Married taxpayers may elect to file separate returns.
Head of Household. You generally must be unmarried and you must have paid more than half the cost of maintaining a home for you and a qualifying person.
Qualifying Widow(er) with Dependent Child. If your spouse died during 2005 or 2006, you have a qualifying child and meet certain other conditions; you may be able to choose this filing status.
For more information about filing status see publication 501, Exemptions, Standard Deduction, and Filing Information available on the IRS website at IRS.gov or by calling 800-TAXFORM (800-829-3676).
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Link:
* Publication 501, Exemptions, Standard Deduction, and Filing Information (PDF 196K) -- http://www.irs.gov/pub/irs-pdf/p501.pdf
TT-2008-01: SEVEN WAYS TO GET A JUMP START ON YOUR TAXES
SEVEN WAYS TO GET A JUMP START ON YOUR TAXES
Earlier is better when it comes to working on your taxes. Taxpayers are encouraged to get a head start on tax preparation, especially since early filers avoid the last minute rush and get their refunds sooner.
Here are seven easy ways to get a good jump on your taxes long before the April deadline is here:
Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.
Get the right forms. They’re available around the clock on the IRS Web site, IRS.gov.
Take your time. Don’t forget to leave room for a coffee break when filling out your tax return as rushing can mean making a mistake.
Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS and speed up your refund.
E-filing is easy. E-filing catches math errors and provides confirmation your return has been received and gives you a faster refund.
Get the fastest refund. When you e-file file early, you receive your refund faster. When you choose direct deposit, you receive your refund sooner than waiting for a check.
Don’t panic. If you have a problem or a question, remember the IRS is there to help. Try the IRS Web site at IRS.gov or call the IRS customer service number at 800-829-1040.
Are you concerned that your efforts to get ready early may be affected by the Alternative Minimum Tax legislation passed by Congress in December? Most individuals will not be impacted, so it is still a good idea to get an early start on your preparations. Even if you are filing one of five forms affected by the recent legislation, the IRS expects to be ready for your return by February 11. You can review a list of the impacted forms and find out the latest news about when the IRS will be ready for your return at IRS.gov.
Links:
* Forms and Publications -- http://www.irs.gov/formspubs/index.html
* E-filing -- http://www.irs.gov/efile/index.html
* 1040 Central -- http://www.irs.gov/individuals/article/0,,id=118506,00.html
Earlier is better when it comes to working on your taxes. Taxpayers are encouraged to get a head start on tax preparation, especially since early filers avoid the last minute rush and get their refunds sooner.
Here are seven easy ways to get a good jump on your taxes long before the April deadline is here:
Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.
Get the right forms. They’re available around the clock on the IRS Web site, IRS.gov.
Take your time. Don’t forget to leave room for a coffee break when filling out your tax return as rushing can mean making a mistake.
Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS and speed up your refund.
E-filing is easy. E-filing catches math errors and provides confirmation your return has been received and gives you a faster refund.
Get the fastest refund. When you e-file file early, you receive your refund faster. When you choose direct deposit, you receive your refund sooner than waiting for a check.
Don’t panic. If you have a problem or a question, remember the IRS is there to help. Try the IRS Web site at IRS.gov or call the IRS customer service number at 800-829-1040.
Are you concerned that your efforts to get ready early may be affected by the Alternative Minimum Tax legislation passed by Congress in December? Most individuals will not be impacted, so it is still a good idea to get an early start on your preparations. Even if you are filing one of five forms affected by the recent legislation, the IRS expects to be ready for your return by February 11. You can review a list of the impacted forms and find out the latest news about when the IRS will be ready for your return at IRS.gov.
Links:
* Forms and Publications -- http://www.irs.gov/formspubs/index.html
* E-filing -- http://www.irs.gov/efile/index.html
* 1040 Central -- http://www.irs.gov/individuals/article/0,,id=118506,00.html
Wednesday, January 2, 2008
IRS Newswire
Tax Packages Arrive in Mail; IRS Reminds Taxpayers to e-file and Watch for Tax Law Changes
IR-2008-1, Jan. 2, 2008
WASHINGTON — With millions of tax packages beginning to arrive in mailboxes this week, the Internal Revenue Service today reminded taxpayers to watch for commonly overlooked tax credits and late tax law changes that could affect their tax returns.
"The IRS will work to make this tax season as smooth as possible for taxpayers," said Linda Stiff, Acting IRS Commissioner. “We strongly encourage taxpayers to file electronically, particularly those affected by late tax law changes. Filing electronically makes things easier by reducing errors and speeding up refunds.”
The IRS is sending 16.5 million 1040 tax packages to taxpayers this month who have filed paper tax returns in the past. The number of paper packages has dropped rapidly in recent years, falling from 34 million packages in just four years. The paper packages are becoming much less common as the popularity of electronic filing soars. Last year, nearly 80 million tax returns used e-file, representing about 57 percent of all returns.
This year, the individual income tax packages mailed to taxpayers do not include any tax credit forms and certain other forms due to late tax law changes involving the alternative minimum tax (AMT) “patch.” Copies of these forms are available on IRS.gov. Taxpayers who e-file should update their tax software to ensure that they are using the updated forms.
The AMT changes also mean that as many as 13.5 million taxpayers using five forms related to the Alternative Minimum Tax (AMT) legislation will have to wait to file tax returns until the IRS completes the reprogramming of its systems for the new law The IRS has targeted Feb. 11 as the potential starting date for taxpayers to begin submitting the five AMT-related returns affected by the legislation.
The February date allows the IRS enough time to update and test its systems to accommodate the AMT changes without major disruptions to other operations related to the tax season. Although as many as 13.5 million taxpayers will not be able to file their returns until Feb. 11, the effect of the delay may be lessened by the fact that based on previous filing patterns only 3 million to 4 million taxpayers file returns with the five affected forms during these early weeks of the filing season.
The Feb. 11 delay caused by the AMT patch will affect any taxpayer using any of these five forms:
• Form 8863, Education Credits.
• Form 5695, Residential Energy Credits.
• Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
• Form 8396, Mortgage Interest Credit.
• Form 8859, District of Columbia First-Time Homebuyer Credit.
Although these five forms require significant additional reprogramming due to the AMT patch, the IRS has been able to reprogram its systems to begin processing seven other AMT-related forms, including Form 6251, Alternative Minimum Tax - Individuals. Taxpayers filing these seven forms should not experience delays in filing, and the IRS expects to begin processing those returns starting on time.
Electronic returns involving those five forms will not be accepted until systems are updated in February. Similarly, paper filers should wait to file as well. All other e-file and paper returns will be accepted starting in January.
The IRS urges affected taxpayers to file electronically in order to reduce wait times for their refunds. E-file with direct deposit gets refunds in as little as 10 days, while paper returns take four to six weeks. Especially for taxpayers affected by the AMT changes, e-file with direct deposit is the fastest way to get a refund.
Indeed, the IRS expects continued growth in IRS e-file, which is now in its 22nd year. Taxpayers can file their returns electronically one of three ways: through their tax preparer, through over-the-counter software or through IRS Free File.
IRS Free File is a partnership between the IRS and a consortium of tax software manufacturers who offer free software and free electronic filing to taxpayers who meet certain criteria. For 2008, taxpayers who earned $54,000 or less will be eligible for Free File. Approximately 70 percent of all taxpayers, or 95 million people, will meet the income criteria. Taxpayers must access Free File through IRS.gov.
Taxpayers also should be aware of important tax credits such as the Earned Income Tax Credit (EITC), the Saver’s Credit and the Child Tax Credit. Taxpayers must meet certain income limits for all three but tax credits such as these can significantly lower tax bills or increase refunds.
The IRS Web site, www.irs.gov, is the round-the-clock source of information. Taxpayers can go to 1040 Central on IRS.gov to find the latest tax news, information about tax law changes, up-to-date publications and information about valuable tax credits.
The IRS also has issued an increasing number of warnings over the last few years about e-mail scams targeting individuals, businesses, exempt organizations and other taxpayers. The scams, popularly known as “phishing” scams, use phony e-mails that falsely claim to come from the IRS. As a rule, the IRS does not send unsolicited e-mails to taxpayers. Taxpayers who receive an unsolicited e-mail communication claiming to be from the IRS can forward the message to phishing@irs.gov using instructions posted on IRS.gov.
IR-2008-1, Jan. 2, 2008
WASHINGTON — With millions of tax packages beginning to arrive in mailboxes this week, the Internal Revenue Service today reminded taxpayers to watch for commonly overlooked tax credits and late tax law changes that could affect their tax returns.
"The IRS will work to make this tax season as smooth as possible for taxpayers," said Linda Stiff, Acting IRS Commissioner. “We strongly encourage taxpayers to file electronically, particularly those affected by late tax law changes. Filing electronically makes things easier by reducing errors and speeding up refunds.”
The IRS is sending 16.5 million 1040 tax packages to taxpayers this month who have filed paper tax returns in the past. The number of paper packages has dropped rapidly in recent years, falling from 34 million packages in just four years. The paper packages are becoming much less common as the popularity of electronic filing soars. Last year, nearly 80 million tax returns used e-file, representing about 57 percent of all returns.
This year, the individual income tax packages mailed to taxpayers do not include any tax credit forms and certain other forms due to late tax law changes involving the alternative minimum tax (AMT) “patch.” Copies of these forms are available on IRS.gov. Taxpayers who e-file should update their tax software to ensure that they are using the updated forms.
The AMT changes also mean that as many as 13.5 million taxpayers using five forms related to the Alternative Minimum Tax (AMT) legislation will have to wait to file tax returns until the IRS completes the reprogramming of its systems for the new law The IRS has targeted Feb. 11 as the potential starting date for taxpayers to begin submitting the five AMT-related returns affected by the legislation.
The February date allows the IRS enough time to update and test its systems to accommodate the AMT changes without major disruptions to other operations related to the tax season. Although as many as 13.5 million taxpayers will not be able to file their returns until Feb. 11, the effect of the delay may be lessened by the fact that based on previous filing patterns only 3 million to 4 million taxpayers file returns with the five affected forms during these early weeks of the filing season.
The Feb. 11 delay caused by the AMT patch will affect any taxpayer using any of these five forms:
• Form 8863, Education Credits.
• Form 5695, Residential Energy Credits.
• Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
• Form 8396, Mortgage Interest Credit.
• Form 8859, District of Columbia First-Time Homebuyer Credit.
Although these five forms require significant additional reprogramming due to the AMT patch, the IRS has been able to reprogram its systems to begin processing seven other AMT-related forms, including Form 6251, Alternative Minimum Tax - Individuals. Taxpayers filing these seven forms should not experience delays in filing, and the IRS expects to begin processing those returns starting on time.
Electronic returns involving those five forms will not be accepted until systems are updated in February. Similarly, paper filers should wait to file as well. All other e-file and paper returns will be accepted starting in January.
The IRS urges affected taxpayers to file electronically in order to reduce wait times for their refunds. E-file with direct deposit gets refunds in as little as 10 days, while paper returns take four to six weeks. Especially for taxpayers affected by the AMT changes, e-file with direct deposit is the fastest way to get a refund.
Indeed, the IRS expects continued growth in IRS e-file, which is now in its 22nd year. Taxpayers can file their returns electronically one of three ways: through their tax preparer, through over-the-counter software or through IRS Free File.
IRS Free File is a partnership between the IRS and a consortium of tax software manufacturers who offer free software and free electronic filing to taxpayers who meet certain criteria. For 2008, taxpayers who earned $54,000 or less will be eligible for Free File. Approximately 70 percent of all taxpayers, or 95 million people, will meet the income criteria. Taxpayers must access Free File through IRS.gov.
Taxpayers also should be aware of important tax credits such as the Earned Income Tax Credit (EITC), the Saver’s Credit and the Child Tax Credit. Taxpayers must meet certain income limits for all three but tax credits such as these can significantly lower tax bills or increase refunds.
The IRS Web site, www.irs.gov, is the round-the-clock source of information. Taxpayers can go to 1040 Central on IRS.gov to find the latest tax news, information about tax law changes, up-to-date publications and information about valuable tax credits.
The IRS also has issued an increasing number of warnings over the last few years about e-mail scams targeting individuals, businesses, exempt organizations and other taxpayers. The scams, popularly known as “phishing” scams, use phony e-mails that falsely claim to come from the IRS. As a rule, the IRS does not send unsolicited e-mails to taxpayers. Taxpayers who receive an unsolicited e-mail communication claiming to be from the IRS can forward the message to phishing@irs.gov using instructions posted on IRS.gov.
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