Agencies share tips about filing 2007 income tax
By Sylvie Belmond belmond@theacorn.com

As local residents prepare to file their 2007 income tax returns, state and federal officials unveiled new programs, promised better service and reminded taxpayers to be aware of commonly overlooked credits.

Customer service from the State Franchise Tax Board will be improved this year, said California Tax Board Chairman and state Controller John Chiang.

"Filing taxes is now easier then ever before," he said. Qualified individuals will have the option to use the ReadyReturn or CalFile systems to process their returns at no cost.

California residents can get help in completing and filing their returns. In fact, those who qualify for the new ReadyReturn program won't have to fill out any forms at all. Instead, single taxpayers who work for a single employer, take standard deductions and have no dependents need only approve a filled-in form, sign it and return it to the state.

"The state does the work for taxpayers by using information it already has to simply generate the tax return." Chiang said. However, taxpayers still have full control over their returns: They can make changes to the prefilled return forms or use any other filing method, Chiang said.

More than 6 million people will qualify to file electronically using CalFile, which is offered in English and Spanish. That program serves taxpayers who earn up to $310,837 (married, filing jointly), have itemized deductions and some tax credits and are using forms 540 2EZ, 540A, and, to a limited degree, form 540.

For more information about these programs visit the State Franchise Board website at www.ftb.ca.gov.

Federal income tax returns

The Internal Revenue Service encourages taxpayers to file electronically, noting that about 13.5 million taxpayers may be affected by delays due to late tax law changes.

Individual income tax packages mailed to taxpayers this year won't include any tax credit forms or certain other forms because of the last month's enactment of the Alternative Minimum Tax "patch," according to an IRS spokesperson.

Updated copies of these forms are available in the "Forms and Publications" section on the IRS website at www.IRS.gov. Taxpayers who use commercial software to prepare and file taxes electronically should update their software to ensure they are using the most current forms, according to the IRS.

The new laws also mean that people using certain forms will have to wait until Feb. 11 to file their tax returns. Forms affected by the delay include: Form 8863, Education Credits; Form 5695, Residential Energy Credits; Schedule 2, Form 1040A, Child and Dependent Care Expenses for Form 1040A Filers; Form 8396, Mortgage Interest Credit; and Form 8859, District of Columbia First-Time Homebuyer Credit.

"The IRS will work to make this tax season as smooth as possible for taxpayers," said Linda Stiff, acting IRS commissioner. "We strongly encourage taxpayers to file electronically, particularly those affected by late tax law changes. Filing electronically makes things easier by reducing errors and speeding up refunds," she said.

The IRS website provides tips and information to help people find often overlooked deductions and credits that can lower tax bills or help taxpayers get bigger refunds, said IRS spokesperson Erik Smith.

Millions can use Free File

IRS offers a Free File electronic program for eligible taxpayers.

People who earned $54,000 or less in 2007 can use Free File to prepare their taxes online. "That's 70 percent of all taxpayers, roughly 95 million Americans," according to an IRS press release.

To use the program, individuals must first go to the main portal of the IRS website, www.irs.gov, click on "Free File," then press the "Start Now" button and choose a tax preparation company from the list provided.

Not all companies offer services to everyone. Filers need to evaluate which company is best suited for their individual needs. Once a company is selected, users click on the link to that company's website and begin preparing their return.

Although Free File is available only for federal income tax returns, some participating Free File Alliance companies also offer state tax return preparation and efiling at no charge.