By Brant Goldwyn, Washington Staff Writer
Taxpayers will notice some changes in filing their 2006 tax returns, and the IRS is trying to educate filers ahead of time.
Recent Tax Extenders Passed by Congress
Right before adjourning, Congress reaffirmed a series of tax measures that had previously expired. Because of the timing of their passage, they are not included in many IRS documents for the 2006 tax year. Kevin Coulter of the IRS Forms and Publications Division discussed the IRS's procedures for claiming these tax benefits, which must be filed on Form 1040 and not Form 1040A. These special instructions must be followed in order to claim these tax breaks.
- For the tuition and fees deduction, taxpayers should report amounts on Line 35, which is designated as the manufacturing production deduction.
- The above-the-line deduction for educational expenses should be reported on Line 23, which is designated for the Archer Medical Savings Account. Taxpayers should put an "E" next to the amount.
- The state sales tax deduction is an itemized deduction that must be claimed on Schedule A. Taxpayers should report the amount on Line 5 with the designation "ST."
Refund for Telephone Excise Tax
Coulter described this as a one-time refund for taxes paid on long distance and bundled service for the period March 1, 2003 through July 31, 2006. Excise taxes on local service are not eligible for the refund.
The IRS estimates that 150 million taxpayers are eligible for total refunds of $8 billion. Recognizing the difficulty in determining the actual taxes paid, the IRS is providing standard refunds of $30 to $60, based on the exemptions claimed. Coulter said that Form 1040 will have an additional line for reporting the refund claim.
Nonfilers are also eligible for a refund, according to IRS official David Williams. They may claim the standard refund on Form 1040-EZ-T. Taxpayers who want to claim actual payments must report their monthly amounts on Form 8913. Persons who were overseas during part of the claims period can still claim the standard amount.
Service Center Address Changes
Christopher Egger, IRS field director for submissions processing, said that the IRS has begun to close some of its returns processing divisions because of the increase in electronic filing. The IRS closed returns processing functions at Brookhaven and Memphis, and will close the Philadelphia operation in 2007. Other activities will continue at these service centers.
Returns will not be accepted at Philadelphia after June 30, 2007, including extensions for 2006 returns. Later returns must be filed at Kansas City. International returns that have been filed at Philadelphia must be filed in Austin.
- Related items:
- Final Tax Package Extended; Congress Adjourns
- Failure to Renew Expired Tax Extenders Subject of Concern, Debate
- Congressional Panel Examines Business Tax Reform
- Rules Change for Hybrid Vehicle Tax Credit
- Congress Passes Comprehensive Pension Reform Bill
- Estate Tax/Minimum Wage Bill Falls in Senate; Pension Legislation Approved
- House Couples Estate Tax Reform with Minimum Wage Hike
- House Passes Estate Tax Relief Bill, Senate Vote Expected Next
- Full Estate Tax Repeal Dies in Senate; Compromise Reform Under Consideration
- Congress Extends Tax Relief Provisions with Offsets, Seeks To Reinstate Expired Credits
Added to the news on December 28, 2006.
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