2007 Instruction 1040 - IRS tax forms

1 Userid: _____DTD I1040AZ04 Leadpct: 0/0% Pt. size: 10 Draft Ok to PrintPAGER/XMLF ileid:D:\USERS\d4rfb\documents\Epicfiles \ 2007 \07I1040(10-18).XML(Init. & date)Page 1 of 90 of instructions 104016:05 - 23-OCT- 2007 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before YOUR RETURNYou may be mailing your return to a differentaddress this year. See the back INSURANCE PREMIUMSYou may be able to deduct qualified mortgageinsurance premiums. See the instructions forSchedules A& : THIS BOOKLET DOES NOT CONTAIN TAX FORMS2007 TAKE THE FREE WAYIf you made $54,000 or less in 2007 , you re one ofthe 95+ million taxpayers who are eligible to e-filefor free!Department of the TreasuryInternal Revenue all electronic filingand payment options,including Free page 4 or go to: Cat. No. 24811 VPage 2 of 90 of instructions 104016:05 - 23-OCT- 2007 The type and rule above prints on all proofs including departmental reproduction proofs.

2 MUST be removed before of ContentsContentsPageContentsPageDepartme ntof theIRS Customer Service 32007 Earned Income Credit (EIC) 51 Help With Unresolved Tax IssuesInternal(Taxpayer Advocate Service).. 59 RevenueServiceIRS 4 Amount You 60 What s 5 Third Party 61 Filing 6 Sign Your 62Do You Have To File?.. 6 Assemble Your 62 When and Where Should You File?.. 62007 Tax 63 Where To Report Certain Items2007 Tax Computation Worksheet .. 75 From 2007 forms W-2, 1098, andGeneral 8 Refund 79 Tax Return Page 10 What Is TeleTax?.. 79 Line instructions for form 12 Calling the 81 Name and 12 Quick and Easy Access to Tax HelpSocial Security Number (SSN).. 12and Tax 82 Presidential Election Campaign Fund . 12 Disclosure, Privacy Act, and PaperworkFiling 12 Reduction Act 14 Order Blank for forms 18 Major Categories of Federal IncomeAdjusted Gross 26and Outlays For Fiscal Year 2006 .. 86 Tax and 312007 Tax Rate 87 Other 42-2-Page 3 of 90 of instructions 104016:05 - 23-OCT- 2007 The type and rule above prints on all proofs including departmental reproduction proofs.

3 MUST be removed before IRS MissionProvide America s taxpayers top quality service by helping them understand and meet their tax responsibilitiesand by applying the tax law with integrity and fairness to Customer Service StandardsAt the IRS, our goal is to continually improve the quality ofour services. To achieve that goal, we have developed customerservice standards in the following areas. Access to information. Accuracy. Prompt refunds. Canceling penalties. Resolving problems. Simpler forms . Easier filing and payment you would like information about the IRS standards anda report of our accomplishments, see Pub. With Unresolved Tax IssuesTaxpayer Advocate ServiceThe Taxpayer Advocate Service (TAS) is an independentorganization within the IRS whose employees assisttaxpayers who are experiencing economic harm, who areseeking help in resolving tax problems that have not beenresolved through normal channels, or who believe that anIRS system or procedure is not working as it should.

4 Youmay be eligible for assistance if: You are experiencing economic harm or significantcost (including fees for professional representation), You have experienced a delay of more than 30 days toresolve your tax issue, or You have not received a response or resolution to theproblem by the date promised by the service is free, confidential, tailored to meet yourneeds, and available for businesses as well as is at least one local taxpayer advocate in each state,the District of Columbia, and Puerto Rico. Becauseadvocates are part of the IRS, they know the tax systemand how to navigate it. If you qualify for assistance, youwill receive personalized service from a knowledgeableadvocate who will: Listen to your problem, Help you understand what needs to be done toresolve it, and Stay with you every step of the way until yourproblem is can contact the Taxpayer Advocate Service by: Calling the TAS toll-free case intake line at1-877-777-4778 or TTY/TDD 1-800-829-4059, Calling or writing your local taxpayer advocate,whose address and phone number are listed in thegovernment listings in your local telephone directoryand in Pub.

5 1546, Taxpayer Advocate Service YourVoice at the IRS, Filing form 911, Request for Taxpayer AdvocateService Assistance (and Application for TaxpayerAssistance Order), with the Taxpayer AdvocateService, or Asking an IRS employee to complete form 911 onyour get a copy of form 911 or learn more about theTaxpayer Advocate Service, go to Income Taxpayer Clinics (LITCs)LITCs are independent organizations that provide lowincome taxpayers with representation in federal taxcontroversies with the IRS for free or for a nominal clinics also provide tax education and outreach fortaxpayers with limited English proficiency or who speakEnglish as a second language. Pub. 4134, Low IncomeTaxpayer Clinic List, provides information on clinics inyour area. It is available at or your local 4 of 90 of instructions 104016:05 - 23-OCT- 2007 The type and rule above prints on all proofs including departmental reproduction proofs.

6 MUST be removed before $54,000 or less? e-file ForFree!If your 2007 adjusted gross income was $54,000 or less,you re one of the 95+ million taxpayers who are eligible forFree File. Free File, a service offered by the IRS inpartnership with the Free File Alliance, a group of taxpreparation software companies, is: Fast, easy, and safe to use; Available in English and Spanish; Accessible online 24 hours a day, 7 days a week(You will need Internet access to Free File. Also,Free File can only be accessed by going throughthe website even if you used FreeFile in previous years.); and Absolutely FREE. No hidden feesIf you don t qualify for Free File, then you may want tocheck out the Partners Page on for low-coste-file IRS e-file there are threeways:Use a tax taxpayers rely on tax professionals to handletheir returns and most tax professionals can e-file yourreturn.

7 You just have to be sure to , tax professionals can charge a fee for IRS can vary depending on the professional andspecific services rendered, so be sure to discuss a can easily prepare and e-file your own tax do so, you ll need: A computer with Internet access, and IRS-approved tax preparation software which isavailable via the Internet for online use, fordownload from the Internet, and in retail stores foroffline use. Visit for a VITA Program offers free tax help for low tomoderate income taxpayers. The Tax Counseling forthe Elderly (TCE) Program provides free tax help topeople age 60 and ! It s Never Been s easy to see why more than 60% of taxpayers e-file their tax returns: it s faster, easier, and more convenient than paperfiling. E-filing also reduces the chance of making mistakes. Plus, if your 2007 adjusted gross income was $54,000 or less, youcan e-file for FREE by using Free File at !

8 Totally Safe and SecureMore than half a billion federal tax returns have been e-filed! The IRS uses the mostsecure technology available to safeguard your personal information. So you can restassured that when you e-file, your information will be : for the latest and Get the Benefits A faster refund than by paper filing in as little as 10 days with Direct Deposit. An emailed proof of receipt within 48 hours after the IRS receives your return,which you can t get with paper filing. Reduced chance of making mistakes since IRS e-file software checks yourreturn. In fact, e-filed returns have a 1% or less error rate, compared to 20% withpaper returns. (Please note that e-filing your tax return does not impact or changethe chance of an audit.) Save time by preparing and e-filing federal and state returns together. You can electronically sign your return with a secure, self-selected PIN number.

9 If you owe, you can authorize an electronic funds withdrawal or pay by creditcard. You can also file a return early and pay the amount you owe later. Help the environment, use less paper, and save taxpayer money it costs lessto process an e-filed return than a paper can accomplish many things electronically within The Electronic IRS is a gateway to the many IRSelectronic options and it s available 24 hours a day, 7 days a week. Should you choose to file a paper return, you ll findinformation, resources, and all of the forms ready to download. -4-Page 5 of 90 of instructions 104016:05 - 23-OCT- 2007 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before s NewMailing your may be mailingEarned income credit (EIC).You may beWhat s New for 2007your return to a different address this yearable to take the EIC if:because the IRS has changed the filing lo-Tax benefits following tax A child lived with you and you earnedcation for several areas.

10 If you received anbenefits were extended through than $38,646 ($41,646 if married filingenvelope with your tax package, please usejointly), or Deduction for educator expenses init. Otherwise, see Where Do You File? onfiguring adjusted gross income. A child did not live with you and youthe back less than $12,880 ($15,880 if mar- Tuition and fees filing jointly).Domestic production activities deduction. District of Columbia first-timeThe deduction rate for 2007 is increased tohomebuyer maximum AGI you can have andAlternative minimum tax (AMT)still get the credit also has increased. YouUnreported social security and Medicareexemption amount AMTmay be able to take the credit if your AGI istax on wages. If you are an employee andexemption amount is decreased to $33,750less than the amount in the above list thatyour employer did not withhold social se-($45,000 if married filing jointly or a quali-applies to you.)