AMT “Patch” Passes Congress – IRS Processing of Some Tax Returns Delayed
(ARA) – Auspiciously, the day before adjourning for Winter Break, Congress passed another one year fix -- averting higher taxes for the majority of middle-income America facing the dreaded Alternative Minimum Tax (AMT). The Senate version of the bill, which does not compensate for a $50 billion loss of tax revenue, won majority favor and was signed into law by President Bush. The passage of this legislation boosts the AMT exemption and extends a number of credits for 2007.
In 2006, approximately four million households were required to pay the AMT. Without ratification of another provisional one-year patch to boost the amount of the AMT exemption, an additional 20 million households would have to pay an estimated average of $2,000 more in federal taxes for 2007. Another 27 million filers, who claim a variety of credits closely connected to the AMT (i.e. child and dependent care, education, residential energy and state/local taxes), were also in danger of feeling the AMT pinch.
Speculation that the start of this tax season would be delayed has been addressed by the IRS. The 2007 tax season will start on time for everyone except a small portion of taxpayers. Taxpayers who utilize five credit forms, however, will face IRS processing delays. The IRS has targeted Feb. 11 as the likely processing date for taxpayers filing the following:
* Form 8863 – Education Credits
* Form 5695 – Residential Energy Credits
* Form 1040-A, Schedule 2 – Child and Dependent Care Credit
* Form 8396 – Mortgage Interest Credit
* Form 8859 – District of Columbia First-Time Homebuyer Credit
Of the 22 million taxpayers who used tax software to prepare and electronically file their tax return last year, some may wonder, “Considering the number of last minute legislation changes, will tax software be current and reliable to use this tax season?”
To ensure taxpayers have the opportunity to submit their return, the IRS made all revised forms associated with the AMT available immediately to tax professionals and software companies who produce and support software and online services.
Good advice for taxpayers this tax season: use e-file. Those who submit their IRS return electronically will still fare better because, as the IRS works to process backlogged returns, returns received electronically will be processed faster.
“We encourage our customers who use e-file to enter their tax data into TaxACT and submit their electronic return as they would normally -- the program is current and up-to-date. Once the IRS begins accepting returns, returns will be processed. TaxACT customers can rest easy knowing no other method will help them to get a faster tax refund -- in as few as ten days,” says Stephanie Behrends, spokeswoman for 2nd Story Software, Inc. -- makers of the popular tax program TaxACT.
“Those who e-file their tax return also receive “Proof of Filing” which is an acknowledgement issued to the filer reflecting when the IRS received and accepted the return. Conversely, if an error is detected, the IRS can communicate the problem fast – even pinpointing the location of the error in the tax return.”
Do you have more questions regarding the AMT and how it may impact you? More information is available at www.IRS.gov -- just enter keyword “AMT” or “Alternative Minimum Tax”. To get a clear picture of the AMT’s impact on your return or for more information regarding TaxACT, visit www.TaxACT.com and start your free Standard tax return.
Courtesy of ARAcontent