- The Washington Times - Thursday, January 11, 2007

About 60 tax preparers rallying at Union Station yesterday could mean only one thing: Tax season has arrived.

Tax preparation company H&R; Block held similar rallies in more than 50 cities nationwide, which consisted mostly of tax preparers handing out leaflets to passers-by and answering questions.

Today is the first day in 2007 that the IRS accepts the electronic tax returns.

This year, taxpayers should watch for “strange nuances” in the deductions they can claim, said Phil Bowman, H&R; Block vice president.

The IRS forms do not exhibit some of the tax changes President Bush signed into law in December. Congress approved the Tax Relief and Health Care Act of 2006 after the IRS printed the returns and instructions.

Among the changes, Congress reinstated a tax deduction for elementary through high school educators.

The IRS expects more tax returns to be filed electronically this year.

Last year, a record 73 million tax returns were filed over the Internet, which was 6.9 percent more than in 2005.

“It’s faster, it’s easier and it’s more convenient,” said IRS spokesman Bruce Friedland. “The total number of individual tax returns in calendar year 2007 is expected to be about 136 million, and the IRS expects a record number of e-filers this year.”

Anyone paying income taxes should watch for at least five key changes to the credits and deductions they can claim, according to tax preparers.

• Taxpayers who owned a landline or mobile phone between March 2003 and July 2006 are eligible for a standard refund of $30 to $60, depending on the number of exemptions claimed. The refund results from the repeal of the 1898 federal excise tax on long-distance telephone service that funded the Spanish-American War.

• Taxpayers can divide their tax refunds for direct deposits among as many as three checking, savings or retirement accounts. Until this year, they could choose only one account.

• Congress extended the “saver’s credit” this year that allows a tax credit for up to half the amount of a contribution to an Individual Retirement Account or other retirement plan.

• The IRS is allowing tax credits of $250 to $2,600 for purchases of new hybrid vehicles and a one-time credit of $500 on purchases of energy-efficient windows, doors, furnaces and air conditioners last year.

• The income levels to qualify for Earned Income Tax Credits changed again last year, altering the eligibility to claim the credit.

Many taxpayers shopping, working or passing through Union Station said they were unconcerned about their income taxes so early in the season.

“I haven’t gotten my W-2s yet, so I can’t do it if I want to,” said Kathleen Mon, a legal assistant from Union, N.J.

She said she plans to prepare the returns by herself despite any tax law changes.

Scott Matheson, a librarian and law student from Boulder, Colo., said his only concern about preparing his own taxes involved his move from Connecticut to Colorado.

“I have to do two state returns,” he said.

Polina Zajkova, a 23-year-old sales clerk at Neuhaus Chocolatiers, said she lets someone else figure out how to do her tax returns.

“My mother is an accountant,” she explained.

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