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The
Internal Revenue Service on Friday advised taxpayers on how to
file for deductions passed by Congress that were too late to be
included in 2006 forms.
Nearly 1 million taxpayers might not have their
returns processed until early February, the agency warned.
The instructions involve three deductions renewed by
Congress just before it adjourned two weeks ago and signed into
law by President Bush last week: for state and local sales taxes
in states that don’t have income taxes, for higher tuition costs
and for educator expenses.
The tax agency urged taxpayers seeking the three
deductions to file electronically. Software will be updated to
include the three tax provisions and taxpayers "will get their
refunds faster through e-file," IRS Commissioner Mark W. Everson
said. "Even more importantly, e-file will greatly reduce the
chances of making an error compared to claiming the deductions
on the paper 1040."
The IRS said that 6 million taxpayers in states
without state income taxes who receive Form 1040 by mid-January
will receive
a special mailing of Publication 600, which will include tables
and instructions for claiming the sales tax deduction.
Publication 600 also was posted Friday to the IRS web
site, www.irs.gov.
Form 1040 will not be updated and the higher-education
and educator expense deductions cannot be claimed on Form 1040A.
The IRS said the deduction for tuition and fees can be
claimed on Form 1040, line 35, "Domestic production activities
deduction," by entering "T on the dotted line to the left of
that line. Similarly, the educator expense adjustment can be
claimed on line 23, "Archer MSA Deduction," by entering "E" on
the dotted line to the left of that line entry.
The sales-tax deduction was claimed on about 11.2
million tax returns filed for tax year 2005.
The higher-education provision, which allows
deductions for up to $4,000 of tuition and fee costs, was
claimed on about 4.7 million returns.
The educator-expense provision, allowing teachers to
deduct up to $250 for personal expenditures on school supplies,
was claimed on 3.5 million returns.
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