Tax Filing Season is Just Around the Corner

Tax filing season is just around the corner when federal income tax packages start to arrive in mailboxes around the country. Beginning December 26, more than 107 million filers will begin to receive the annual mailing.

Fred T. Goldberg, Jr., the new Commissioner of the Internal Revenue Service, asked taxpayers to take a moment to review the tax packages so they can begin gathering information needed to file their returns. "IRS appreciates the efforts you make to file an accurate tax return," Goldberg wrote in his tax package message. "We can improve the processing of returns and issuance of refunds if you file early and use the label we sent to you. As your new Commissioner, I assure you we are deeply committed to do everything we can to make it easier for you to comply with the tax laws," Goldberg said.

Although the 1989 Forms 1040, 1040A and 1040EZ closely resemble those which taxpayers used last year, there are a number of changes taxpayers should note. These result from legislation as well as from continuing IRS efforts to improve the forms. This year a number of changes were made in response to suggestions from the public and tax professionals at town meetings held across the country in 1989.

Among the form changes are:

• There are two name lines at the top of Forms 1040 and 1040A so married taxpayers filing jointly can ensure that their names are listed in the same order as their social security numbers.
• Social security numbers are now required for dependents age two or older. In the past this applied to dependents age five or older.
• Taxpayers who claim the child and dependent care credit or who receive excludable benefits from an employer- provided dependent care assistance program must report on their tax return the taxpayer identification number, name and address of the care provider. New Form W-10 may be used to get the correct information from care providers.
• Exemption amounts have been increased to $2,000 for the taxpayer, spouse and each dependent, up from $1,950 last year, and the standard deduction is increased for most people.

Taxpayers eligible for Medicare should note that there are some new lines on this year's Forms 1040 and 1040A that they should ignore -- the lines for the supplemental Medicare premium.

The IRS said that when the 1989 tax forms were developed, lines were included to report the supplemental Medicare premium - - line 54 on Form 1040 and line 23 on Form 1040A. At the time the IRS had to begin printing the tax forms packages last fall, Congress was considering the repeal of the supplemental Medicare premium. To try to avoid confusion, the IRS cautioned taxpayers in the tax package instructions that pending legislation could affect the treatment of these supplemental payments.

Now that the law is being repealed, taxpayers should simply ignore the lines on their returns that call for an amount to be entered for the supplemental premium.

The IRS said that this year postcards are being mailed to over 10 million filers of returns with farm or small business schedules who had their tax returns commercially prepared last year. These taxpayers can take the postcard, which contains their name and address label, to their preparers when their returns are prepared. The average printing and postage cost per postcard is 12.6 cents; the average printing and postage cost per tax package is 25.3 cents.

In addition to mailing postcards and tax packages, forms will be available beginning January 1 at most IRS offices and at many banks, post offices and libraries.

Tax forms as well as tax information publications are also available by calling the IRS toll-free at 1-800-424-3676. The tax package contains a list of the most commonly requested publications as well as an order form. The IRS can fill requests for forms and publications in 7 to 10 days from the date the IRS receives the order.

For this filing season the IRS expects to receive over 111 million individual income tax returns. Last year about 110 million returns were filed. The IRS issued 75 million refunds, and the average refund was about $875.

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