COVINGTON - The celebrations of 2007 may be over, but there's still some old business at hand.
A new year means it's time to give account to the government of last year's earnings.
Tax season is getting under way. During the month of January, the IRS is sending 16.5 million 1040 tax packages to taxpayers who have filed paper returns in the past.
The IRS reports that paper filing has dropped in recent years, falling from 34 million packages four years ago to 16.5 million last year.
For tax year 2006, nearly 80 million tax returns were filed via E-file, representing about 57 percent of all returns.
Those who E-file can receive refunds in two to three weeks, while filing by mail can take eight to 12 weeks, according to Cathy Cheek, manager at H&R Block's Lee Street office in Covington.
Returns can be filed electronically through a tax preparer, through over the counter software or through IRS Free File. Taxpayers who earned $54,000 or less are eligible for Free File, which can be accessed through www.IRS.gov.
"E-filing is the safer way of doing it. It's a much safer way than to use mail, and faster and more accurate," Cheek said.
This year, individual income tax packages mailed to taxpayers do not include tax credit forms due to late tax law changes involving the alternative minimum tax patch (AMT).
"The AMT tax originally was put in play so higher income taxpayers would pay their fair share," Cheek said. "The AMT has not been inflated with the economy, so now it has trickled down and is now affecting middle class individuals."
In an attempt to delay the impact on the middle class, Congress passed legislation known as the AMT Patch in December.
"The patch will hopefully fix it to make the AMT as it was meant originally," Cheek said.
However, the law won't go into affect until Feb. 11, meaning those impacted by the AMT must wait to file returns.
As many as 13.5 million taxpayers using five forms related to AMT legislation will have to wait to file tax returns until the IRS completes reprogramming of its systems for the new law.
The delay will affect taxpayers using any of these five forms:
· Form 8863, Education Credits;
· Form 5695, Residential Energy Credits;
· Form 1040A Schedule 2, Child and Dependent Care Expenses for Form 1040A filers;
· Form 8396, Mortgage Interest Credit; and
· Form 8859, District of Columbia First-Time Homebuyer Credit.
Returns involving those forms will not be accepted until the systems are updated. All other returns will be accepted starting in January, except for those in higher income brackets who are impacted by the AMT, "and those people know who they are," Cheek said.
The deadline to file tax returns is April 15.
A six-month automatic extension is available so long as the extension form is filed by April 15, Cheek said.
"If they owe any money, that has to be paid by April 15. An extension to file is only an extension to file paperwork, not an extension to pay a balance due ... That's the way it's always been, but people don't understand that," she said.
New this year, private mortgage insurance for first-time homebuyers or individuals buying homes with less than 20 percent down will be tax deductible.
The IRS is also issuing warnings about an increasing number of e-mail scams.
Called "phishing" scams, the e-mails falsely claim to come from the IRS. The IRS does not send unsolicited e-mails to taxpayers. Anyone who receives such an e-mail should forward it to firstname.lastname@example.org.
Federal and state tax forms will be available to the public at the Newton County Library at 7116 Floyd St. and the Covington Post Office at 2131 Stallings St., N.W.
Rockdale County residents can obtain tax forms at the Nancy Guinn Memorial Library at 865 Green Street and the Conyers Post Office at 1705 Ga. Highway 138 SE, Conyers, GA 30013.
Crystal Tatum can be reached at email@example.com.