Trying to File Taxes Early? Think Again
Military.com
Last December, President Bush signed the Tax Relief and Health Care Act of 2006 (HR 6408) into law. The key provisions of this bill that will help military families are the tuition and higher education tax deductions and the inclusion of combat pay in the earned income credit calculation. However, the late passage of this act has put the Internal Revenue Service (IRS) and early filers in a bind.
The IRS announced that the new changes forced them to suspend early tax filing for taxpayers who want to use these credits until Feb.3. The new date allows the IRS enough time to update its systems to accommodate the tax law changes without disrupting other operations tied to the tax filing season, according to an IRS press release. Any paper or electronic returns sent before Feb. 3 will be accepted but not processed until after the February deadline.
“Based on filings early this year, only about 930,000 tax returns claimed any of the three provisions by Feb.1.” says IRS Commissioner Mark W. Everson, in an IRS-issued statement. “This year the IRS expects to receive about 136 million tax returns,” Everson adds.
In order to claim any of these deductions, taxpayers must use form 1040 and follow these instructions regarding tuition and higher education deductions:
• Taxpayers file Form 1040 to take this deduction for up to $4,000 of tuition and fees paid to a post-secondary institution. It cannot be claimed on Form 1040A.
• The deduction for tuition and fees will be claimed on Form 1040, line 35, “Domestic production activities deduction.” Enter “T” on the blank space to the left of that line entry if claiming the tuition and fees deduction, or “B” if claiming both a deduction for domestic production activities and the deduction for tuition and fees. For those entering “B,” tax payers must attach a breakdown showing the amounts claimed for each deduction.
The IRS encourages early filers to continue filing taxes online. Filing online will help expedite the tax return process.
“We encourage taxpayers who think they may claim these deductions to file electronically,” Everson says. “They will get their refunds faster through e-file.”
For more information about filing taxes visit
http://www.irs.gov/ or
http://www.military.com/finance
