Resolve to File Taxes Early? Not So Fast!

By: dsvabeachdems
Published On: 12/31/2007 2:08:37 PM

 IRS


The tax filing information that has been made public regarding the fallout from the Alternative Minimum Tax (AMT) patch is somewhat obtuse. As a result, millions of taxpayers who have never imagined AMT having an impact on their returns are in for a rude surprise if they have resolved to file early this year or simply want an early refund.

The irony is that many AMT filers will be completely unaffected by the IRS delay for electronic filing caused by the tardy resolution of the AMT issue by Congress and the President. If you will file using any of the following Federal forms, you may not E-file prior to 11 February. Forget AMT for a moment while you review the list:

G求 Form 8863, Education Credits.
G求 Form 5695, Residential Energy Credits.
G求 Form 1040A's Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
G求 Form 8396, Mortgage Interest Credit.
G求 Form 8859, District of Columbia First-Time Homebuyer Credit.
The good news is that there is a work-around for the Form 1040A, Schedule 2. Simply opt to file with the longer Form 1040 and use the Form 2441 to claim the credit. The bad news is that you can't get around the E-filing issue by filing a paper return. The other good news is that you can always file your return without making these claims and then submit an amended return later. And the bad news for that is that that may require you to amend your state return too and may draw attention to your return(s).

If you have purchased tax filing software or will purchase any manufactured before the changes have been made, you are going to need an update at the very least. If for some reason you are able to transmit your return with any of these forms attached prior to the IRS ready date, you will likely get a very vanilla reject code. Then you won't have a clue how many or which errors you have.

For anyone not eligible for these credits, the IRS filing season begins on 11 January. Even if you are an AMT filer. There's more information at the IRS website.

Cross posted at VBDems.org - Blogging our way to Democratic wins in Virginia Beach! Go RK!


Comments



The delay and audits (tx2vadem - 1/3/2008 12:48:35 AM)
In my opinion, the delay solely rests with Democrats.  They knew this was coming.  They had plenty of time before the 11th hour to get it fixed.  They knew what the president's objections were.  They chose to fight this battle and will probably piss off a lot of people because of it.  I don't think people expecting their refund care much that Democrats were digging in their heels to follow Pay-Go rules.

On audits, the IRS examines only 1% of all individual tax returns filed.  If your total positive income (i.e. no deductions or losses or credits) is less than 100k and more than 25k, your chance of being audited drops to 0.6%.  Even if you file an amended return, those are still very low percentages.  Oh all courtesy of the IRS's tax data!