Finance Globe
U.S. financial and economic topics from several finance writers.
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Tax Season Opens January 30 for Most
Though the tax filing season is open for most taxpayers - whether they are filing electronically or on paper - on January 30th, the Internal Revenue Service will not be ready to accept returns claiming education credits until mid-February, the agency reported on Monday.
Those affected by the delay are taxpayers filing form 8863, Education Credits, used to claim two higher education credits -- the American Opportunity Tax Credit and the Lifetime Learning Credit. Typically through the mid-February period, about 3 million tax returns include Form 8863, less than a quarter of those filed during the year.
The delay is due to errors the IRS found in its processing systems for form 8863 as part of its annual check-up. Each year, the IRS tests its programs before the start of tax season to catch any problems that may lead to processing errors or tax refund delays.
The IRS emphasized that the delayed start will have no impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction.
As always, the IRS advises taxpayers who qualify to file their return electronically. E-filing is safer and gets your return to the IRS faster. If you e-file and opt to have your refund directly deposited into your bank account, you could have your money back in your hands in as little as ten days.
If you are a taxpayers whose annual income is $57,000 or less for tax year 2012, you can file your return electronically without cost through IRS Free File. Start at the IRS website, choose from a list of tax preparation software, and you’ll be guided through the process of preparing your return. After finishing your federal return, you’ll also be given the option to also complete and e-file your state return, though there is likely to be a small charge for your state return.
If your income is higher, you can still file your returns electronically for free through IRS Free File Fillable Forms. This program comes without the tax preparation software and is basically the electronic version of paper forms, so it is most suited to taxpayers who are comfortable completing their own tax returns and do not need the guidance that tax software provides.
Taxpayers can start the process at the IRS website at http://www.irs.gov/Filing. Each year you must start at the IRS website, even if you used it in a previous year. (You will be charged their standard software fee if you bypass the IRS site and go directly to the tax preparation site.)
Sources:
Internal Revenue Service
Those affected by the delay are taxpayers filing form 8863, Education Credits, used to claim two higher education credits -- the American Opportunity Tax Credit and the Lifetime Learning Credit. Typically through the mid-February period, about 3 million tax returns include Form 8863, less than a quarter of those filed during the year.
The delay is due to errors the IRS found in its processing systems for form 8863 as part of its annual check-up. Each year, the IRS tests its programs before the start of tax season to catch any problems that may lead to processing errors or tax refund delays.
The IRS emphasized that the delayed start will have no impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction.
As always, the IRS advises taxpayers who qualify to file their return electronically. E-filing is safer and gets your return to the IRS faster. If you e-file and opt to have your refund directly deposited into your bank account, you could have your money back in your hands in as little as ten days.
If you are a taxpayers whose annual income is $57,000 or less for tax year 2012, you can file your return electronically without cost through IRS Free File. Start at the IRS website, choose from a list of tax preparation software, and you’ll be guided through the process of preparing your return. After finishing your federal return, you’ll also be given the option to also complete and e-file your state return, though there is likely to be a small charge for your state return.
If your income is higher, you can still file your returns electronically for free through IRS Free File Fillable Forms. This program comes without the tax preparation software and is basically the electronic version of paper forms, so it is most suited to taxpayers who are comfortable completing their own tax returns and do not need the guidance that tax software provides.
Taxpayers can start the process at the IRS website at http://www.irs.gov/Filing. Each year you must start at the IRS website, even if you used it in a previous year. (You will be charged their standard software fee if you bypass the IRS site and go directly to the tax preparation site.)
Sources:
Internal Revenue Service
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