January 17, 2008 12:00 am

Tax Filing Season Has Begun

If you have your necessary information, you can now file your 2007 income tax return with the IRS. As of January 11, the IRS had begun to accept 2007 income tax returns, including those filed electronically.

E-filing

The IRS encourages e-filing for several reasons:

  • Taxpayers obtain refunds faster. Taxpayers who opt to e-file their return and have refunds directly deposited into their bank account or other authorized account can expect to receive the money within 10 days of filing.
  • There is proof of filing. E-filers receive an acknowledgment from the IRS within 48 hours of filing that their return has been accepted for processing. If critical information, such as a Social Security number, is missing, the return will be rejected; add the missing information and re-submit for processing.
  • Taxpayers have flexibility in making payments. Taxpayers who owe money can e-file now and pay later if they prefer. As long as the balance owed is submitted by April 15, 2008, payment is viewed as timely.
  • There is greater accuracy than with paper returns. The error rate on an e-filed return is about 1%, compared with about 20% on paper returns.

AMT-affected taxpayers

About 13.5 million taxpayers cannot have their returns processed until about February 11, 2008. The IRS needs more time to program their computers in light of alternative minimum tax legislation that was enacted in late December. Affected taxpayers include those who file any of the following five forms:

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Tax Glossary

Cash method of accounting

Reporting income when actually or constructively received and deducting expenses when paid. Certain businesses may not use the cash method.

More terms