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Question:
Last
year, I heard that there's no point in filing your
tax return early in 2008 because the IRS isn't ready.
Is that true? Will BUYandHOLD be sending me the right
information?
Kal
Jasper
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Answer:
Dear Mr.
Jasper,
You
heard correctly. The late 2007 tax law change may
affect you, although it does not have broad implications.
Here's what happened...
Around
holiday time, Congress approved what I would call
a stopgap piece of legislation. Its focus was to prevent
the alternative minimum tax (AMT) from being part
of the tax picture for more and more American taxpayers.
Because
the ruling happened so late in the year, the IRS was
unable to update all the various tax forms involved
in the change.
Who
Is Affected
Therefore,
if you need to use one of the five tax credit forms
that is being updated, you must wait until February
11 to file electronically. If you're stubborn and
file anyway, the IRS will reject your return.
Note:
If you have an adjusted gross income of $54,000
or less, you can e-file your return for free through
the IRS Free File program. You will need to connect
with a software provider that is approved by the IRS.
You do this through the website: www.irs.gov.
Filing
On Paper
If
you file on paper and you're eligible for one of the
five credits (see box below) you must get updated
forms. They were not included in the tax packages
mailed in December. However, you can now download
them at: www.irs.gov
or call the IRS and request them: 1-800-829-3676.
The
Five Tax Credits
The
five tax credits requiring new forms are:
| Tax
Credit |
Form |
| Child
& dependent care |
1040A,
Schedule 2 |
| District
of Columbia resident* |
8859 |
| Education
credits |
8863 |
| Mortgage
interest credit |
8396 |
| Residential
energy credits |
5695 |
* First-time home buyer credit
Prepare
Now
If
you have to wait to file until February 11, you can
still do your taxes in advance. The major tax software
providers are allowing customers and clients to prepare
their returns now, then once the IRS starts accepting
the returns, the software companies will e-file them
for you.
BUYandHOLD
You
will receive tax information about your BUYandHOLD
account by January 31, 2008.
Good
Luck!
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