The Tax Man Cometh

The stockings are all put away. The fire in the chimney is extinguished and St. Nick as already come and gone. Guess who's coming next? Uncle Sam and he has his hand out and is ready to get his. Before, I get the calculator and tax forms out, I thought I'd better gather some info. Info cuts down on confusion and just maybe I'll learn something to keep more of my money in my pockets.

In my digging I found that the business mileage rate is now $.48 ½ cents per mile. If you take care of a sick loved one or have moved recently then you can deduct $.20 per mile; not quite enough to make up for the gas but, a tax break none the less.

EIC, earned income credit, has increased the amount you can receive as a refund to $2853 for one child or $4716 for more than one child and to $428 without a child. This year also, nontaxable combat pay has been extended. You can even have it added as earned income when calculating EIC for 2007.

The most interesting credit I found for this year, the Whistle Blower's Credit. This credit allows you to deduct your attorney's fees if you report a company for tax law violations to the IRS. Your attorney's fees and court costs are a write off, but only up to the amount of reward you receive from the IRS after December 19, 2006.

One of two credits that can no longer be claimed is the electric vehicle credit. If you've place a car in service after 2006 there is no credit. Also, the credits for hurricane Katrina, Rita, and Wilma can no longer be deducted.

W-2's are due out by January 31, 2008. The earliest filing date is January 14, 2008 unless you are using any of the following forms:
 8863 Education Credit
 5695 Residential Energy Credit
 1040A's Schedule 2, Child Dependent Expense
 8396 Mortgage Interest Credit
 8859 D.C. First Time Homebuyer's Credit
The earliest filing date for these forms is February 11, 2008

There is a new form available, 1040EZ-T. It is a new shorter form for people who don't need to file a regular return. The shorter form allows taxpayers to request their refund over the phone. The IRS encourages people who can to use the form and to file electronically through Free File. Filers can either ask for the standard amount or attach form 8913 to request actual amounts.

Believe it or not there is a form to request tax help, it's called, yep you guessed it Form 911. Also for assistance, you can call 877-777-4778. The Tax Advocate Service will, if you make less than $54,000 a year, for free prepare your tax return. Military personnel and their families automatically get all of their tax services free.

For the first time, you can split your refund in three. Form 8888 is used to send money to up to three separate banks, credit unions, brokerage firms, and/ or mutual funds that you choose.

Once you've filed it's easy to track your refund online on the IRS website. The site is secure and asks for basic info from your tax return to track your funds.

Just remember you are responsible for what is on your return regardless of who's prepared it. Whether you hire an accountant, go to a tax service place, or accept the free help that IRS offers, its your return and you are accountable.

The IRS is really pushing for e-filing. E-filing is not only convenient but it's more accurate. Filing electronically cuts down on "clerical" errors. Remember tax day is April 15th. Happy filing.