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Delays or business as usual?

Wednesday, Jan. 2
Posted 11 a.m. EST

Tax season 2008 on schedule for most filers

Welcome to the 2008 tax season! I know you've been waiting all year for this.

Actually, many of you have. You're the folks who intentionally have too much withheld from your paycheck every year so that you'll get a tax refund. Despite the admonitions from me and other tax experts, you insist on this forced savings account.

OK, so it's better than not saving at all. But please, as one of your 2008 tax resolutions, at least consider adjusting your withholding so that you don't get so much back.

By getting a bit more money in each paycheck, you can stash it in an account (savings, CD, money market) where it'll earn you, not the IRS, some interest. I know rates are low right now, but any extra amount is welcome. Similarly, keeping as much out of Uncle Sam's hands as possible is always a laudable goal.

OK. Enough preaching. Here's some good news for the 2008 tax season: Most of you who are expecting refunds should get them with no problem.

Most AMT issues ironed out: Despite earlier warnings that congressional dawdling on short-term alternative minimum tax legislation could slow down the filing process for us all (blogged about here), it looks like that for most taxpayers, tax season 2008 will go on as planned.

Around 13.5 million filers will see some delay. These are the folks that will be hit by the AMT. But for the rest of us, which come to around 126 million, tax filing will go as usual.

The IRS says Feb. 11 is the target filing date for taxpayers who have to file any of five forms that have AMT implications. They are:


  • Form 8863, Education Credits.
  • Form 5695, Residential Energy Credits.
  • Schedule 2, Child and Dependent Care Expenses for Form 1040A filers.
  • Form 8396, Mortgage Interest Credit.
  • Form 8859, District of Columbia First-Time Homebuyer Credit.

    It will take until next month, according to the IRS, for the agency to complete the reprogramming of its systems and testing it on these five forms.

    If you must file one of these five forms to complete your 2007 taxes, the IRS says not to send in your return until the Feb. 11 date. It doesn't matter whether you plan to e-file or snail mail paper forms, the IRS will not accept them until all its systems are updated in February.

    Other filers, however, should be OK. The IRS has reprogrammed its systems to begin processing seven other AMT-related forms, and the agency expects to begin processing those and all other non-AMT returns starting on Jan. 14.

    "We regret the inconvenience the delay will mean for millions of early tax filers, especially those expecting a refund," said Linda Stiff, Acting IRS Commissioner, in an IRS statement. "We've taken extraordinary steps to figure out a way that we can start the filing season on time for most taxpayers, including some using AMT-related forms. Our goal has always been to make sure we can accurately process tax returns while getting refunds to taxpayers as quickly as possible."

    Of course, if you'd adjusted your withholding last year, you wouldn't be grumbling today about any possible refund delay. I'm just saying.

  • -- Posted: Jan. 2, 2008

     
     
     
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