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2007 Tax Guide    
  A tax tip a day will help keep the IRS away. You'll find them here, along with good advice on filing your return.
     
See Bankrate's 2008 Tax Guide for the most up-to-date tax information.
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Out-of-date forms could mean slow refunds

"This has had a lot of attention, but over the years there have been changes that came in after the program was in stores," says Julie Miller, spokeswoman for Intuit, maker of TurboTax. "Even when there isn't (last-minute) legislation, every year some federal forms are not ready when filing season kicks off. And we've had lots of practice with state tax forms that typically come in later than federal tax forms, sometimes not until late January."

But this year's form situation has prompted the tax software giant to make one change. "Unique this year is a hard stop in the program before you print or e-file to make sure that all your forms are updated," says Miller.

The procedure is similar at 2nd Story Software, maker of TaxACT. "Regardless of whether a taxpayer is using a preview product to forecast a tax amount due or a refund or is using a final product, they can use the update feature," says Stephanie Behrends, communications manager for the Cedar Rapids, Iowa-based company.

If customers of either tax product use the online versions, updates that include the three extended provisions will be automatic. That's also the case for the Free File program, the IRS-tax software collaboration that will be available on Jan. 16 to taxpayers with adjusted gross incomes of $52,000 or less.

In announcing the alternate deduction guidelines, the IRS is encouraging filers to use either Free File or other e-filing avenues to "minimize confusion over the late changes and reduce the chance of making extender-related errors on their returns." E-filing makes the jobs of IRS processors easier, too.

But about half of all taxpayers (and the IRS is expecting a total of 136 million returns this year) still file the old-fashioned way, filling in paper forms and snail mailing them. These filers will have a bit of extra work to correctly enter the extended tax deductions on now-outdated forms.

Sorting out the sales tax
If last year's claims are any indication, around 11 million filers will be looking for where to enter the deduction for state sales taxes.

While the IRS opted to omit the sales tax break on its individual return forms, the agency took a chance that it would be renewed and put together Publication 600. This booklet contains instructions and tables of applicable sales tax deduction amounts based on a filer's place of residence and filing status. Instead of tallying up a year's worth of separate receipts, taxpayers can simply claim the appropriate table amount.

The IRS plans to mail Publication 600 to about 6 million filers within the next few weeks. Don't worry if you're not on that list. The document is already available online at the IRS Web site.

-- Posted: Jan. 4, 2007
 
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