Most Taxpayers Unaffected By the Alternative Minimum Tax “Patch”

The IRS has announced that the “patch,” or fix, that Congress passed late in 2007 that will prevent many middle income taxpayers from getting hit with the Alternative Minimum Tax, or ATM, may cause a delay in tax filing for about 13.5 million taxpayers. Fortunately, the vast majority of taxpayers will face no delay at all in the processing of their 2007 tax return.

only taxpayers who will face a delay in filing their tax returns are those who have to file one of five forms that are affected by the Alternative Minimum Tax calculation. Those five forms are

· Form 8863 – Education Credits

· Form 5695 – Residential Energy Credits

· Schedule 2 (Form 1040A)-Child and Dependent Care Expenses for 1040 A filers

· Form 8396 Mortgage Interest Credit

· Form 8859 District of Columbia First Time Homebuyer Credit.

The IRS says about 13.5 million taxpayers file returns with the above forms. Because of the lateness of Congress in passing the AMT patch, the IRS says it will not be able to process returns with these forms until February 11. Fortunately, according to the IRS, only 3 to 4 million taxpayers out of the 13.5 million affected usually file their tax returns before February 11 anyway.

A taxpayer who needs to file Schedule 2 of Form 1040 A, Child and Dependent Care Expenses for 1040 A, could get around the delay by filing the regular 1040 form and using Form 2441, Child and Dependent Care expenses, for that form.

For the rest of the 125 million or so taxpayers not affected by the above mentioned five forms, the IRS says the tax-filing season will start on time. Taxpayers who paper file can go ahead and file any time now and the IRS will start accepting e-filed returns on January 11.

At this point, the IRS says it is not extending the tax-filing deadline because of the processing delay. Right now, the tax-filing deadline for all taxpayers is Tuesday, April 15, 2008. Of course, taxpayers can get an automatic 6-month extension by filing Form 4868. For more information, please go to www.irs.gov.