RISMEDIA, Jan. 21, 2008-(MCT)-Income tax season won’t start on time this year. If you’re not looking forward to facing the Tax Man, that’s not a problem. But if you want that refund right away, it could be.
How big of a problem is not clear. Many who file early are doing so to get money back. Among them are South Florida’s poorest residents. The taxpayers who qualify for thousands of dollars in the form of an earned income tax credit, which is available to people who don’t make much money.
Tens of thousands of South Floridians claimed the credit last year, which produced almost $3 billion for Florida taxpayers in 2006. This year, the credit can bring a family with more than one child as much as $4,716.
The credit is still there in the tax law and the refunds will be delivered, some of them later than usual. It’s because the IRS can’t start to process certain tax forms until next month.
You can blame the delay on Congress, which changed the tax law at the very last minute. Congress waited until Dec. 20 to rewrite the rules regarding the alternative minimum tax, which is a parallel system designed to levy taxes on those who owe very little or no tax. Because the income threshold at which the minimum tax begins to apply was going to be very low, it was set to ensnare more than 20 million taxpayers. Congress fixed this and raised the income level, but that caused other problems.
The IRS had to reprogram its computer systems. As a result, you won’t be able to electronically file your taxes in January, as in past years, or get your paper return processed before Feb. 11 if you use any of the following forms: 8863, Education Credits, for the Hope and Lifetime Learning credits; 5695, Residential Energy Credits; Schedule 2 of the 1040A, Child and Dependent Care Expenses for Form 1040A filers; 8396, Mortgage Interest Credit, which is used by lower-income home buyers who have been issued credits by state or local governments, and a fifth form, 8859, that’s only for District of Columbia first-time home buyers.
The IRS didn’t include those forms in the tax packages it mailed to taxpayers. They are available online, however.
Who uses those? Nationwide, the IRS estimates 13.5 million taxpayers do and among them, 3 million to 4 million tend to be early filers.
In South Florida, Alphonse Piard, director of financial literacy services at Sant La — Haitian Neighborhood Center, in the Little Haiti neighborhood of Miami, figures about one in five of those who have their taxes prepared at the center use one of two affected forms. The education credits, for families who have children in college, are essential, as is the form for child-care expenses. Piard and others who work at the volunteer tax preparation sites in South Florida expect the season to go smoothly, once it begins.
We’re two weeks away from that, because employers have to deliver wage statements to their workers by Jan. 31.
If you are held up by the delay in the start of tax-filing season, here’s one survival tip: If you do need one of those forms, you can make up for any lost time by both e-filing and by allowing the IRS to directly deposit any refund in your bank account. That should get your refund within 10 business days of filing, Piard said. Otherwise, paper returns will take four to six weeks.
Just prepare the rest of your return now and be ready to push the send button next month. If you don’t use any of those affected forms, you can electronically file your taxes now. The IRS opened its electronic portal last Friday.
Copyright © 2008, South Florida Sun-Sentinel
Distributed by McClatchy-Tribune Information Services.
Copyright© 2013 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com