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Home > Consumer Focus Archive > Tax Season 2007
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Tax Season 2007
 Following are just some of the most important changes for tax year 2007. For more specific information, consult a tax professional.
Posted: February 1, 2008 |
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Deductions and Tax Credits
 If you made a contribution to charity in 2007, or if you plan to make some in 2008, keep in mind several important tax law changes. There are new ways to contribute, as well as new rules about the kind of documentation required to prove a gift.
Special tax law provisions may help you recover financially from the impact of a disaster, especially if the area where you live in has been declared a major disaster area. Depending on the circumstances, the IRS may grant you additional time to file a return and pay your taxes.
Tax credits can help you pay part of the cost of raising a family, going to college, saving for retirement, making energy-saving improvements to your home and getting daycare so you can work or go to school.
These credits can increase your refund or reduce the tax you owe. Usually, credits can only lower your tax to zero. But some credits, such as the EITC and the child tax credit can actually exceed your tax. Though some credits are available to people at all income levels, others have income restrictions. These include the EITC, saver’s credit, education credits and child tax credit.
The other notable energy efficiency credit is for the purchase of a hybrid vehicle. The list of qualified hybrid vehicles for the Alternative Motor Vehicle Credit continues to expand. The tax credit for hybrid vehicles applies to vehicles purchased during the 2007 calendar year on or after January 1, 2007. It could be as much as $3,400 for those who purchased the most fuel-efficient vehicles.
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 Filing Electronically
The IRS e-file program offers quick, easy, and accurate alternatives to filing your return on paper. Electronic filing and paying ensures that your taxes are properly credited, and that your history is safe and secure. You can file your taxes electronically whether you do them yourself or work with a tax professional.
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Free File
 If you earned $54,000 or less in 2007, you can use Free File to prepare your taxes online beginning in mid-January 2008.
With Free File, you can:
- Get a fast refund, often in 10 days or less with Direct Deposit.
- Benefit from Free File’s automatic checks for accuracy.
- Receive a quick confirmation within 48 hours that your return was received.
Free File is also available in Spanish and is so easy you can do it yourself. You must access Free File through the IRS website.
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If You’re Due a Refund
 Save it, don’t spend it! If you file using Forms 1040, 1040A, 1040EZ, 1040NR, 1040NR-EZ, 1040-PR, or 1040-SS. You can elect to have your federal income tax refund automatically deposited into one, two or three accounts at a bank or other financial institution (such as a mutual fund, brokerage firm, or credit union). In order to use this split refund option, you must also file Form 8888, Direct Deposit of Refund to More Than One Account.
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Where’s my Refund?
 Whether you split your refund among several accounts, opted for direct deposit to one account or asked IRS to mail you a check, you can track your refund on Where’s My Refund?
To get to your personal refund information, be ready to enter your:
- Social Security Number (or IRS Individual Taxpayer Identification Number)
- Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er))
- Exact refund amount shown on your return
If you don’t receive your refund within 28 days from the original IRS mailing date shown on Where’s My Refund? you can start a refund trace online.
If Where’s My Refund? Shows that IRS was unable to deliver your refund, you can change your address online.
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Alternative Minimum Tax (AMT) Assistant for Individuals
 The AMT came into being with the Tax Reform Act of 1969. Its purpose was to collect more taxes from high-income taxpayers who could claim so many deductions that they would owe little or no income tax. A growing number of middle-income taxpayers are discovering they are subject to the AMT. Generally, if your gross income is above $75,000, you should run your numbers through IRS Form 6251, called The AMT Assistant. Just answer a few simple questions about entries on your draft 1040, and the system does the rest. You will see the results immediately and know whether or not you owe the AMT. You will see the results immediately and know whether or not you owe the AMT in addition to your regular taxes. If you do have to file using the AMT, here’s Form 6251.
Your entries are anonymous and the information you provide is only used for the purpose of determining your AMT status. All entries are erased when you exit or start over. See the “IRS Privacy Policy” for more information.
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Taxpayer Services
 The IRS provides the following sources for forms, publications, and additional information: 1–800–829–1040 (1–800–829–4059 for TTY/TDD)
The VITA Program offers free tax help to low- to moderate-income (generally, $40,000 and below) people who cannot prepare their own tax returns. Certified volunteers sponsored by various organizations receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. Most locations also offer free electronic filing. To locate the nearest VITA site, call 1-800-829-1040.
The Tax Counseling for the Elderly (TCE) Program offers FREE tax help to individuals who are aged 60 or older. Trained volunteers from non-profit organizations provide free tax counseling and basic income tax return preparation for senior citizens.
If you are a low income taxpayer who cannot afford professional tax assistance or if you speak English as a second language and need help understanding you tax rights and responsibilities, you may qualify for help from a LITC (low income taxpayer clinic) that provides free or nominal cost assistance
The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should.
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Other
Resources
This is just a brief overview. For more information,
check out these resources:
Websites*
* Names of resources and organizations included in this online article
are provided as examples only, and their inclusion does not mean that they
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mentioned, this does not mean or imply that it is unsatisfactory.
*If you click on these links, you are leaving FCIC's website.
Please bookmark us before you leave so you can return easily. FCIC is not
responsible for the content of these websites.
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