NORWICH – According to the Internal Revenue Service, the 2008 tax season will begin on time for most taxpayers, despite last minute stop gap measures taken by Congress.
Two weeks ago, Congress took action on the Alternative Minimum Tax (AMT), a system that was originally instituted to prevent wealthy individuals from using deductions and loop holes to avoid paying taxes. The AMT system has been used for years, however because it was not adjusted to account for inflation and other monetary changes, this year 20 million taxpayers, including many middle class families, would have had to pay the AMT. Actions taken by Congress reduced that number to only 4 million, the same number who were subject the AMT last year.
IRS software updates were originally projected to take approximately seven weeks, however, in a statement released last week, the IRS said that for many taxpayers, returns will start to be reviewed in mid-January.
However, a potential 13.5 million taxpayers using five forms related to the AMT will have to wait until the IRS finishes reprogramming its system. The IRS has targeted Feb. 11 as a possible start date for those returns.
The five forms in question are Form 8863, relating to Education Credits; Form 5695, relating to Residential Energy Credits; Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A filers; Form 8396, Mortgage Interest Credit and Form 8859, District of Columbia First-Time Home Buyer Credit.
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