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Saturday, January 12th 2008

8:59 AM

File Your Taxes Electronically--Beware of Date Change

The IRS kicked off the tax return season on 1/11/08 and has started excepting returns. However, Congress passed legislation late last year to fix the alternative minimum tax. The fix came too late for the IRS to update its systems to handle certain forms by the start of the tax season. If you file any of these forms: Form 8863, education credits; Form 5695, residential energy credits; Schedule 2, Form 1040A, child and dependent care expenses; Form 8396, mortgage interest credit; and Form 8859, the D.C. first-time homebuyer credit. you must  wait until Feb. 11 to file your return. Sending your returns in prior to 02/11/08 will result in a rejection of your return, according to David Williams, director of Electronic Tax Administration for the IRS.

Why should I file electronically?

Although there's no guarantee, electronic returns are usually  processed  within 24 hours and your refund is deposited in your account on the following Friday of the date it was excepted. I normally receive my refund anywhere from 8 to 17 days after I file instead of the 6 plus weeks after mailing. Also, in the event of an error or rejection, you'll know within a day or two, make corrections, and resubmit your return the same week.

If you are one of the 97 million or 70% of tax payers that have an adjusted gross income of $54,000, you can file for free at www.irs.gov.

Another important benefit is the savings we can save our country by filing electronically. The cost for the IRS is 29 cents to process an electronic return versus $2.65 for a paper return. This could save the tax payers almost $230, million.

Here's an interesting thought. These tax breaks that the Bush administration continues to boast about helping tax payers will not help these 97 million or 70%. They weren't meant to. Granted, they did receive a tax break--of about $20 bucks. Those that earned around $1 million got a break of about $50,000. Another myth that Bush continues to spew is that workers are making more money under his leadership.The average 2005 income was 4.2 percent more, in real terms, than in 2004. But this increase was almost entirely at the top. One in 500 taxpayers makes more than $1 million, but those taxpayers reported 58 percent of the total income gain, the I.R.S. report, known as Table 1.4, showed. It's kinda like 10 average wage earners sitting at a bar consisting of a teacher, policeman, fireman, factory worker, janitor, postman, secretary, construction worker, meter maid, and an electrician. Let's say the "average" worker there makes $50,000 a year. Ok, now let's say any given worker leaves and in walks Exxon Mobil  CEO  Rex W. Tillerson, who rakes in $13 million a year. The "average" income of these ten just skyrocketed but it didn't do the other nine any good. The Bush and GOP team continues to try to make workers think that they're doing better in higher wages and lower taxes but it's simply not the truth. But then again, honesty hasn't exactly been Bush's long suit.
Andy

Andy

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