Tax season to open on time for most
NORWICH – According to the Internal Revenue Service, the 2008 tax season will begin on time for most taxpayers, despite last minute stop gap measures taken by Congress.
Two weeks ago, Congress took action on the Alternative Minimum Tax (AMT), a system that was originally instituted to prevent wealthy individuals from using deductions and loop holes to avoid paying taxes. The AMT system has been used for years, however because it was not adjusted to account for inflation and other monetary changes, this year 20 million taxpayers, including many middle class families, would have had to pay the AMT. Actions taken by Congress reduced that number to only 4 million, the same number who were subject the AMT last year.
IRS software updates were originally projected to take approximately seven weeks, however, in a statement released last week, the IRS said that for many taxpayers, returns will start to be reviewed in mid-January.
However, a potential 13.5 million taxpayers using five forms related to the AMT will have to wait until the IRS finishes reprogramming its system. The IRS has targeted Feb. 11 as a possible start date for those returns.
The five forms in question are Form 8863, relating to Education Credits; Form 5695, relating to Residential Energy Credits; Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A filers; Form 8396, Mortgage Interest Credit and Form 8859, District of Columbia First-Time Home Buyer Credit.
“We regret the inconvenience this delay will mean for millions of early tax filers, especially those expecting a refund,” said Linda Stiff, acting IRS commissioner in a press release. “We’ve taken extraordinary steps to figure out a way that we can start the filing season on time for most taxpayers, including some using AMT-related forms. Our goal has always been to make sure we can accurately process tax returns while getting refunds to tax payers as quickly as possible.”
The Chenango Earned Income Tax Credit Partnership Committee, an organization that provides free tax preparation for qualifying families, had originally stated concern over the delays, saying they may cause many low-income taxpayers to accept refund loans, which often carry high interest rates and hidden fees. However, the newest developments look positive for the EITC Committee.
“We’re hoping to kick off our VITA site on Saturday, Feb. 2, and we’ll probably be able to serve most of our customers that day,” said Gary Quarella of Opportunities for Chenango, one of the organizations involved in the EITC Partnership. While Quarella said some families eligible for the free tax preparation will most likely see delays, he also said the difference in the time of the refund would most likely only be a matter of a week or two.
“With e-file and the direct deposit, you can get your refund in as little as a week and a half to two weeks,” Quarella said.
Families eligible for free tax preparation must have a combined family income of $39,783 or less. This year, the EITC Committee hopes to serve between 350 and 500 families in the Chenango County area.
For more information about the EITC Committee or to determine if you are eligible, call the EITC Hotline at Opportunities for Chenango at 336-2101, or attend the EITC kick off event on Feb. 2 at Cornell Cooperative Extension.
Two weeks ago, Congress took action on the Alternative Minimum Tax (AMT), a system that was originally instituted to prevent wealthy individuals from using deductions and loop holes to avoid paying taxes. The AMT system has been used for years, however because it was not adjusted to account for inflation and other monetary changes, this year 20 million taxpayers, including many middle class families, would have had to pay the AMT. Actions taken by Congress reduced that number to only 4 million, the same number who were subject the AMT last year.
IRS software updates were originally projected to take approximately seven weeks, however, in a statement released last week, the IRS said that for many taxpayers, returns will start to be reviewed in mid-January.
However, a potential 13.5 million taxpayers using five forms related to the AMT will have to wait until the IRS finishes reprogramming its system. The IRS has targeted Feb. 11 as a possible start date for those returns.
The five forms in question are Form 8863, relating to Education Credits; Form 5695, relating to Residential Energy Credits; Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A filers; Form 8396, Mortgage Interest Credit and Form 8859, District of Columbia First-Time Home Buyer Credit.
“We regret the inconvenience this delay will mean for millions of early tax filers, especially those expecting a refund,” said Linda Stiff, acting IRS commissioner in a press release. “We’ve taken extraordinary steps to figure out a way that we can start the filing season on time for most taxpayers, including some using AMT-related forms. Our goal has always been to make sure we can accurately process tax returns while getting refunds to tax payers as quickly as possible.”
The Chenango Earned Income Tax Credit Partnership Committee, an organization that provides free tax preparation for qualifying families, had originally stated concern over the delays, saying they may cause many low-income taxpayers to accept refund loans, which often carry high interest rates and hidden fees. However, the newest developments look positive for the EITC Committee.
“We’re hoping to kick off our VITA site on Saturday, Feb. 2, and we’ll probably be able to serve most of our customers that day,” said Gary Quarella of Opportunities for Chenango, one of the organizations involved in the EITC Partnership. While Quarella said some families eligible for the free tax preparation will most likely see delays, he also said the difference in the time of the refund would most likely only be a matter of a week or two.
“With e-file and the direct deposit, you can get your refund in as little as a week and a half to two weeks,” Quarella said.
Families eligible for free tax preparation must have a combined family income of $39,783 or less. This year, the EITC Committee hopes to serve between 350 and 500 families in the Chenango County area.
For more information about the EITC Committee or to determine if you are eligible, call the EITC Hotline at Opportunities for Chenango at 336-2101, or attend the EITC kick off event on Feb. 2 at Cornell Cooperative Extension.
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