Tax Laws - Changes and Important Information

Tax Laws - Changes and Important Information

Tax Law Changes for 2006
 
 2006 Tax Law Changes and General Information
Tax Law Legislation - Telephone Excise Tax, Direct Deposit of Refunds, IRS Tax Topics

IRS Efile - Important Dates, Application to participate in the IRS efile Program, Refund Cycle Chart, Efile Logo and Marketing Tool Kit, Where to send Forms

Forms Changes -Form 1040 series changes for tax year 2006

Useful Tools and Information - EITC Assistance, IRS e-services, Advance Notice, State Links, Withholding Calculator


Tax Law Legislation Changes

Form 8913, Telephone Excise Tax Refund
The Telephone Excise Tax Refund (TETR) is a one-time payment available on your 2006 federal income tax return. It is designed to refund previously collected long distance telephone taxes. Individuals, businesses and tax-exempt organizations are eligible to request it.

Form 8888, Direct Deposit of Refund.
The IRS will create a new form, Form 8888, which will give taxpayers greater control over their refunds. Form 8888 will give taxpayers a choice of selecting one, two or three accounts such as checking, savings and retirement account. Taxpayers who want all their refund deposited directly into one account can still use the appropriate line on the Form 1040 series.

IRS Tax Topics:
An online version of the IRS voice-response system. This area contains helpful tips and pointers to relevant resources for taxpayers.



IRS Efile

Important Dates:

Application to Participate in the e-file Program - Answers to Frequently Asked Questions
IRS e-file for business and individual tax returns

Pub 2043 Refund Cycle Chart
Shows the estimated date taxpayers are sent a tax refund based on the date their returns are electronically transmitted and accepted by the IRS.

Use this handy chart to estimate when your clients will be sent their tax refund or when it will be direct deposited in their bank account.

Efile Logo and Marketing Tool Kit
The IRS e-file Marketing Tool Kit contains IRS e-file promotional products and informational publications designed to help Authorized IRS e-file Providers get the word out to current and prospective clients about the benefits of e-file and e-pay. IRS e-file is a method of filing tax returns that is proven to increase the satisfaction of tax professionals and taxpayers. Use the elements in the IRS e-file Marketing Took Kit that work best for you. Take advantage of receiving a FREE IRS e-file Marketing Tool Kit by calling toll free 1-800-829-3676!

Where to File Addresses for Tax Professionals for Use in Calendar Year 2007
This IRS site provides addresses for 2006 filing season.

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Form Changes

Form 1040 Series Changes

1. The Deduction for Educator Expenses expired and the line is replaced with the Archer MSA deduction on Form 1040 and replaced with Penalty on Early Withdrawal of Savings on form 1040A.

2. The Tuition and Fees Deduction expired and the line is replaced with Jury Duty pay for Form 1040/1040A.

**The Deduction for Educator Expenses and Tuition Fees deduction will be reinstated in Early February. Tax returns claiming the Educator Expense or Tuition and Fees deduction cannot be efiled until the IRS reinstates these deductions. Here is a summary of how to enter the major deductions extended by H.R. 6111 on 2006 tax returns:

Educator expenses:
• Taxpayers must file Form 1040 (or Form 1040NR) to take this deduction. It cannot be claimed on Form 1040A.
• Include the deduction on line 23 of Form 1040 (or line 24 of Form 1040NR). To the left of the entry space for that line, enter “E” for educator expenses or “B” for both the Archer MSA deduction and educator expenses. For an entry of ”B," taxpayers also must attach a statement with a breakdown of the amounts.
Tuition and fees deduction:
• Taxpayers must file Form 1040 to take this deduction. It cannot be claimed on Form 1040A.
• Include the deduction on line 35 of Form 1040. To the left of the entry space for that line, enter “T” for tuition and fees or “B” for both the domestic production activities deduction and tuition and fees. For an entry of “B,” taxpayers also must attach a statement with a breakdown of the amounts.


3. Several business credits that were previously reported on Form 1040 will be reported on form 3800.

4. The Adoption Credit has moved to a different line of the form 1040 and was deleted from Form 1040A.

New Forms Accepted for Efile


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Useful Tools and Information

IRS EITC Assistant
The EITC Assistant is an easy-to-use web-based tool that shows you whether or not your clients qualify for the EITC, and why. The EITC Assistant offers a step-by-step process that walks users through each eligibility requirement and can also estimate the amount of credit a taxpayer may receive. Available in English and Spanish.

IRS e-services - Online Tools for Tax Professionals
Tax professionals and payers can now use the e-services suite of web-based products to do business with the IRS electronically. These services are available 24 hours a day, 7 days a week from just about any computer with an Internet connection. New products are now available, including the on-line e-file application.

Advance Notice for Tax Professionals
IRS sometimes releases Revenue Rulings, Revenue Procedures and other technical items in advance of publishing them in the Internal Revenue Bulletin. The full text of these advance items is available for retrieval through this page.

State Links
Collection of links to State government web sites with useful information for businesses. Whether you are already in business, just starting, or expanding to a new state, there is something here for you!

IRS Withholding Calculator
This easy-to-use calculator can help you figure your Federal income tax withholding so your employer can withhold the correct amount from your pay. This is particularly helpful if you've had too much or too little withheld in the past, your situation has changed, or you are starting a new job. You may use the results of the program to help you complete a new Form W-4.

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