It's Income Tax Time

I have worked on preparing tax returns since the age of 13. Once again, thanks to my grandfather and those entrepreneurial skills. Through the years I have learned that many folks are scared to death of the I.R.S. in not preparing their tax return. Or they fail to read the information provided by the I.R.S. that apply to their specific situation. Below I have posted from the I.R.S. some new updates that may have an impact on filing paper form or e-filing, such as how you can now deposit your money in three accounts, claim long distance telephone excise federal tax, and for those who are eligible to use a shorter form.

Tax Tips

For the first time, taxpayers can split their refunds among up to three accounts held by up to three different U.S.financial institutions, such as banks, mutual funds, brokerage firms or credit unions. To split their direct-deposit refundsamong two or three different accounts or financial institutions, taxpayers should complete the new Form 8888, Direct Deposit of Refund to More Than One Account. Taxpayers can also continue to use the direct deposit line on the Forms1040 to electronically send their refunds to one account.

For people who don’t need to file a regular tax return, the IRS has developed a special, shorter form to allow them to request the telephone refund. Copies of the Form 1040EZ-T will be available on IRS.gov, over the phone and at a variety of other locations. The IRS encourages people who qualify for the 1040EZ-T to file electronically through the Free File program, which will be available for free beginning later this month. More than 10 million taxpayers who aren’t normally required to file a tax return may be able to use this new form. Taxpayers can either request the standard amount on this form or attach a Form 8913 to request actual amounts.

Individual taxpayers will be able to request a refund if they paid the federal excise tax on long-distance or bundled service. The government stopped collecting the federal excise tax on long-distance service in August and announced plans to provide refunds of these taxes billed after Feb. 28, 2003, and before Aug. 1, 2006. More than 146 million individual taxpayers are expected to request the refund.

Check with a tax preparer if you need more information.