Tax forms are coming your way, IRS says

By Albert B. Crenshaw
Washington Post

The holiday season has ended. So which season is it now?

That's right ... tax season.

The nation's official Grinch, the Internal Revenue Service, has kicked off this year's filing season, announcing that more than 38 million tax packages and 25 million electronic-filing brochures are in the mail. It cost the IRS $8.2 million for printing and just about $12.2 million for postage.

The IRS estimates that 132 million individual returns will be filed this year. Some 60 percent of taxpayers will be able to file free electronically, and the IRS hopes they will. Last year, a record 47 million tax returns were filed through IRS e-file, the agency said.

The IRS says it has taken some steps to ease the pain of filing, and of course the effects of the big 2001 tax-cut bill continue to be felt.

Some of the changes most likely to affect taxpayers:

• Only taxpayers with taxable interest or ordinary dividends of more than $1,500 will have to file extra schedules. That's because the threshold for filing Schedule B of Form 1040 and Schedule 1 of Form 1040A has been raised to $1,500. According to estimates by the IRS, 15 million fewer taxpayers will need to file these schedules. The previous threshold, in place since 1974, was $400.
• The new 10 percent tax rate is reflected in the 2002 tax table and rate schedules. This new rate applies to the first $6,000 of taxable income ($10,000 for a head of household; $12,000 for married filing jointly or qualifying widow/widower).
• Tax rates above 15 percent have been reduced another half a percentage point, as specified by the 2001 bill. Thus, these rates are 27, 30, 35 and 38.6 percent for 2002.
• Taxpayers will be allowed to deduct 36.5 cents a mile for all business miles driven during 2002. Taxpayers may deduct travel related to qualified medical and moving expenses at a rate of 13 cents a mile.
• Interest paid in 2002 on qualified student loans may be deducted regardless of the age of the loan. Before 2002, only payments made in the first 60 months qualified. The modified adjusted gross income limit for this deduction has also increased.
• For 2002, taxpayers may contribute up to $3,000 ($3,500 if 50 or older at the end of 2002) to either traditional or Roth IRAs. This is up from $2,000, the prior limit. Contributions for 2002 can be made until the due date for filing your return, not including extensions. For most taxpayers, that's April 15.

Have a happy filing season.