Dunnan on Dollars

  Personal Finance Tips from Nancy Dunnan

Tax Legislation Passed In 2007...
May Affect Your Return

January 18, 2008 - Around holiday time last year, Congress approved what I would call a stopgap piece of legislation. Its focus was to prevent the alternative minimum tax (AMT) from being part of the tax picture for a growing number of Americans. It is said that Congress saved about 20 million additional taxpayers from being hit by the AMT.

Although the late 2007 law does not have broad implications, it might possibly affect you.

Who Is Affected

Therefore, if you need to use any or all of the five tax credit forms (see box below) that are being updated, you must wait until February 11 to file electronically. If you're stubborn and file anyway, the IRS will reject your return.

Filing On Paper

If you file on paper and you're eligible for one of the five credits, you must use updated forms. These forms were not included in the tax packages mailed out in December. However, you can now download them at: http://www.irs.gov/ or call the IRS and request them: 1-800-829-3676.

The Five Tax Credits

The five tax credits requiring new forms are:

Prepare Now

If you have to wait to file until February 11, you can still do your taxes in advance. The major tax software providers are allowing customers and clients to prepare their returns now, then once the IRS starts accepting the returns, the software companies will automatically e-file them for you.

On A Related Note

If you have an adjusted gross income of $54,000 or less, you can e-file your return for free through the IRS Free File program. Doing so need not involve any of the above mentioned tax credits. You will, however, need to connect with a software provider that is approved by the IRS. You can do at: http://www.irs.gov/.

- Nancy Dunnan