Tax News

CCH (cch.taxgroup.com) reports:

The IRS reminds taxpayers preparing their tax returns for the October 15 tax-filing extension deadline to double check their returns for often-overlooked tax breaks and to file their returns electronically using IRS e-file or the Free File system. The IRS e-file is fast, accurate and secure, and is an ideal option for those rushing to meet the October 15 deadline because the IRS verifies receipt of an e-filed return. According to the IRS, a record 58 percent of the 135.3 million returns received so far this year have been filed electronically and those filing electronically make fewer mistakes.
Taxpayers with incomes at or below $52,000 are urged to file their returns for free using the Free File link on the IRS's website IRS.gov. According to the IRS, seven in 10 taxpayers qualify to use the software and electronic-filing services made available through the Free File Alliance. Telephone customers can also use Free File to request this year's one-time telephone excise tax refund.
Extended filers are also urged to pay using an electronic funds withdrawal or by making a credit card payment. While there is no fee for processing an electronic funds withdrawal, credit-card payments are subject to convenience fees charged by the authorized service providers. Paper filers, as well as electronic filers, who are unable to pay what they owe may be able to set up a payment agreement with the IRS (see the Online Payment Agreement section on IRS.gov for more information). Taxpayers expecting a refund are also urged to choose direct deposit in order to receive the refund sooner.
Taxpayers are reminded to check their returns for the following, often-overlooked, tax breaks:
Telephone Excise Tax Refund:
A one-time refund of long-distance excise taxes available on tax year 2006 income-tax returns. The refund applies to charges billed from March 2003 through July 2006. The government offers a standard refund amount of $30 to $60, or taxpayers can base their refund request on the actual amount of tax paid. Even if a taxpayer does not normally have to file a return, Form 1040EZ-T (also available through Free File) can be used to request this refund;
Earned Income Tax Credit:
Earned income of less than $38,348 in 2006 may qualify a taxpayer to claim the earned income tax credit. This credit, worth up to $4,536, is available to low and moderate-income workers and working families. A special interactive "EITC Assistant" is available on IRS.gov to help taxpayers determine whether they are eligible;
Savers Credit: Low-and moderate income workers who contributed to a retirement plan, such as an IRA or 401(k), may be able to take the savers credit. This credit is available in addition to any other tax savings that apply. Use Form 8880 to claim the credit;
Extender Tax Breaks:
Several popular tax breaks were renewed too late to be included on 2006 federal income tax forms. Accordingly, many taxpayers need to follow special instructions to claim the deduction for state and local sales taxes, the tuition and fees deduction, as well as the educator expense deduction. In addition, many who qualify for the tuition and fees deduction may reap greater tax savings by, instead, claiming the Hope credit or the lifetime learning credit for a particular student.
Finally, some taxpayers, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by several recent natural disasters, can wait until after October 15 to file.
IR-2007-165, 2007FED ¶46,656
Other References:
Code Sec. 25B
CCH Reference - 2007FED ¶3838.10
Code Sec. 32
CCH Reference - 2007FED ¶4082.048
Code Sec. 164
CCH Reference - 2007FED ¶9502.002
CCH Reference - 2007FED ¶9502.355
Code Sec. 6011
CCH Reference - 2007FED ¶35,141.47
Tax Research Consultant
CCH Reference - TRC FILEIND:15,200
CCH Reference - TRC FILEIND: 15,204
CCH Reference - TRC INDIV: 57,550
CCH Reference - TRC EXCISE: 9,056