Updates for 2007 Editions of Tax Preparer

Tax Preparer
(Form 1040)

NEW: Release 2007.01j

(posted 8/22/2007)

Partnership Edition
(Form 1065)

NEW: Release 2007.01c

(posted 3/22/2007)

California Supplement
(Form 540)

NEW: Release 2007.01h

(posted 4/5/2007)

Manuals and IRS documents

(revised 3/26/2007)

IMPORTANT NEWS

12/31/2007: Tax season to start on time! Within days after the passage of the AMT patch, the IRS released final copies of most affected forms, including Form 6251 and all personal credit forms. Contrary to earlier indications from IRS officials, the IRS now intends to start its tax season on time. However, it will not be ready to process all of the new forms, so returns that contain Form 5695, 8396, 8859, or 8863 will not be processed until February 11. See our main website for more details. Keep up-to-date on the latest status of the forms in our Progress Report: IRS Forms for Tax Year 2007.

12/19/2007: Congress passes AMT patch! The anticipated year-end tax bill with retroactive provisions to patch the AMT just passed both houses today, and the President is expect to sign the bill shortly. However, the bill that passed contains only a tiny portion of the original bill: it provides the AMT patch alone, with no renewal of expiring credit forms for next year and no closing of loopholes or other means of paying for the patch. Unfortunately, the IRS advance drafts described below for the affected forms (Form 6251 and ten credit forms) are based on the assumption by the IRS that the AMT patch would NOT pass, and the IRS plans on no further advance drafts before the final releases. However, the IRS is expected to release these forms in a matter of days.

11/11/2007: Correction to Fall 2007 HowardNews. Contrary to what the print version of our Fall 2007 HowardNews states, we are not dropping Form 8834 from the software (Premium Level). It is true that the Qualified Electric Vehicle Credit has expired in that it applies only to vehicles placed in service before 2007, but partnerships and S Corprations with a fiscal year other than the calendar year may still have such a credit to pass through to partners and shareholders. Therefore, the IRS is retaining the form for one more year and reducing it to a form for reporting credit from pass-through entities, and the revised form will once again be included in the Premium Level of Tax Preparer. The on-line version of the Fall 2007 HowardNews has been revised accordingly.

11/7/2007: Fall 2007 HowardNews now on-line. The IRS has already released Form 1040 and most of its schedules, but is delaying the release of Form 6251 and many credit forms becausing of looming year-end tax legislation. See the Fall 2007 HowardNews for our a review of the IRS releases and advance drafts for the upcoming filing season, along with the impact of the pending legislation. You'll also see what forms we're adding and how the IRS procedures for e-file have changed.

10/28/2007: Progress report on new IRS forms now on-line. The IRS is doing well in their release of forms for the upcoming tax season, but another tax bill is expected by year-end that will change many of them. You can get a sneak peek at what to expect for the next filing season by reading our Progress Report: IRS Forms for Tax Year 2007. We'll update this report on-line as we receive new information from the IRS to keep you abreast of the changes.

8/22/2007: Release 2007.01j now available. An update to earlier releases is now available. It modifies the phaseout of itemized deductions to prevent excessive phaseout for extremely high income (such as AGI more than a million dollars). It also adds another way to exit Tax Preparer: by closing the Tax Preparer Control Panel (Standard and Premium levels only). To install the new update or see more detail on the changes it contains, go to the Downloads page.

7/5/2007: Summer 2007 HowardNews now on-line. A new tax bill was passed by Congress at the end of May, but it was Congress's best-kept secret. It was lost by the press within the Iraq funding bill to which it was attached! See the Summer 2007 HowardNews for details on this important new tax bill, our current specials, and what the software for the next tax season contains.

4/5/2007: California Supplement Release 2007.01h now available. This update adds Form 3805Z, Enterprise Zone Deduction and Credit Summary, to the Premium Level. To install the new update or see more detail on the changes it contains, go to the California Downloads page.

3/26/2007: Revised Tax Forms Guide 2007 Edition. Revisions have been made to the on-screen manual for Form 1040 returns, including the renumbering of figures (to accommodate the figures for Form 1116), and the clarification of instructions for our 1099-INT and 1099-DIV Worksheets (concerning boxes 8 and 9 of Forms 1099-INT and 1099-DIV). Download the latest version from our Manuals page.

3/22/2007: Revised Premium Level Supplement 2007 Edition. A revised on-screen manual for forms contained only in Premium Level software for Form 1040 and Form 1065 returns is now available. Download the latest version from our Manuals page.

Release 2007.01i now available. An update to earlier releases is now available. It makes a number of non-critical changes for more flexibility, better aesthetics, and to correct typographical errors. To install the new update or see more detail on the changes it contains, go to the Downloads page.

Partnership Edition Release 2007.01c now available. Similarly, an update to earlier releases of Partnership Edition is now available, with changes analogous to those for the regular (Form 1040) program . To install the new update or see more detail on the changes it contains, go to the Partnership Downloads page.

3/21/2007: IRS Pub. 553 now available. See IRS Resources on our manuals page for the newly released IRS Publication 553, in which the IRS summarizes the changes for tax year 2006.

3/11/2007: California Supplement Release 2007.01g now available. This update revises printing for graphic Form 540 to ensure proper alignment of data for lines 31, 32, and 33. Even if this change does not affect you, if you file any paper returns you should update to this release because of the important changes to graphic printing described in our entry for 3/9/2007 (for release 2007.01f). To install the new update or see more detail on the changes it contains, go to the California Downloads page.

Partnership Edition Release 2007.01b now available. This release revises Form 4562 worksheets to support additional cases of special depreciation allowance and revises data printing on graphic forms to minimize variations among printers and improve alignment with the graphics. To install the new update or see more detail on the changes it contains, go to the Partnership Downloads page.

3/9/2007: Release 2007.01h now available. An update to earlier releases is now available. It revises the Forms 1040X for proper alignment of preparer's information on printouts, revises Form 1116 (Standard and Premium Levels Only) to avert printout problems with overflow statements, and revises data printing on graphic forms to minimize variations among printers and improve alignment with the graphics. To install the new update or see more detail on the changes it contains, go to the Downloads page.

California Supplement Release 2007.01f now available. This update revises all graphic forms that have registration marks to improve the reliability of FTB scanning of the forms and revises data printing on graphic forms to minimize variations among printers and improve alignment. To install the new update or see more detail on the changes it contains, go to the California Downloads page.

3/7/2007: Release 2007.01g now available. An update to earlier releases is now available. It revises the Forms Menu for Economy and Standard Levels (which had confusing menu numbers in release 2007.01f), revises the Schedule A Sales Tax Worksheet for certain states, mitigates potential e-file problems on Forms 4562 and 6765, and makes a number of subtle improvements in other forms and schedules. To install the new update or see more detail on the changes it contains, go to the Downloads page.

Revised Tax Forms Guide 2007 Edition. Revisions have been made to the on-screen manual for Form 1040 returns. Download the latest version from our Manuals page.

2/20/2007: California Supplement Release 2007.01e now available. This update revises Form 3805P in accordance with a revision that the FTB issued today for its instructions. To install the new update or see more detail on the changes it contains, go to the California Downloads page.

2/18/2007: California Supplement Release 2007.01d now available. This update adds Form 3540 to all levels (for claiming carryovers for repealed credits when there is no Schedule P with the return). It also updates the Windows-graphic e-file voucher (Form 3582) to the 2006 tax year (Standard and Premium Levels only). To install the new update, go to the California Downloads page.

Partnership Edition Release 2007.01a now available. This update adds Form 3468 to all levels and Forms 4255, 6765, and 8271 to the Premium Level. To install the new update, go to the Partnership Downloads page.

2/13/2007: Release 2007.01f now available. An update to earlier releases is now available. It adds Forms 6765, 8271, 8885, and 8889 to the Premium Level, and revises Form 1040X in accordance with a recent revision by the IRS. To install the new update or see more detail on the changes it contains, go to the Downloads page.

2/12/2007: California Supplement Release 2007.01c now available. This update eliminates e-file reject codes 0300 and 0520 for certain returns. To install the new update and see more details on the problems it solves, go to the California Downloads page.

2/10/2007: Progress Report for IRS Forms updated. Most forms are now released by the IRS, but many releases are being revised due to errors and omissions, including Forms 1040X and 8915 in the latest releases. See the latest status of the new forms in our Progress Report for IRS Forms for Tax Year 2006. We'll keep you up-to-date by updating this report as the IRS issues new drafts or final releases.

2/9/2007: Release 2007.01e now available. An update to earlier releases is now available. It adds Form 4136 to the Premium Level and revises printing for Schedule A, line 5. To install the new update or see more detail on the changes it contains, go to the Downloads page.

California Supplement Release 2007.01b now available. This update adds Form 3805P to all levels of the software, for additional taxes on qualified plans, including IRAs. To install the new update, go to the California Downloads page.

2/6/2007: Release 2007.01d now available. An update to earlier releases is now available. It adds Forms 2210, 2210-F, 3468, 5329, and 8606 to all levels and Form 4255 to the Premium Level. To install the new update go to the Downloads page.

1/23/2007: Release 2007.01c now available. An update to earlier releases is now available. It adds Form 8861 (released today by the IRS), revises Form 8822 (in accordance with a revision released today by the IRS), and averts start-up problems for certain people who install EFI2006 e-file transmission software. To install the new update or see more detail on the changes it contains, go to the Downloads page.

1/20/2007: Release 2007.01b now available. An update to earlier releases is now available. It adds Form 5884 (recently released by the IRS) to the Premium Level, revises Form 8379 in its standard deduction allocation, and averts start-up problems for certain people who install EFI2006 e-file transmission software. To install the new update or see more detail on the changes it contains, go to the Downloads page.

1/20/2007: Progress Report for IRS Forms updated. Many forms are still being delayed because of the late December tax bill. See the latest status of the new forms in our Progress Report for IRS Forms for Tax Year 2006. We'll keep you up-to-date by updating this report as the IRS issues new drafts or final releases.

1/17/2007: Release 2007.01a now available. An update to earlier releases is now available. It adds full e-file capability to the Standard and Premium Levels with the addition of Form 8453 and the RAL/QIK Bank Application form. To install the new update or see more detail on the changes it contains, go to the Downloads page.

1/15/2007: Release 2007.01 now available. Another update to the pre-release is now available. It adds the latest Form 1040-ES and brings your program up-to-date with the regular release, which is being shipped to customers today. To install the new update or see more detail on the changes it contains, go to the Downloads page. ( The next release will add Form 8453 so that you can generate e-file output.)

1/13/2007: Release 2007.pre2 now available. Another update to the pre-release is now available. It adds four forms recently released by the IRS: Forms 6478, 8834, and 8859 to the Premium Level, and Form 3800 to all three levels. To install the new update or see more detail on the changes it contains, go to the Downloads page.

1/12/2007: IRS delays many returns until Feb. 3. The IRS announced this week that it will not begin processing until February 3 any return with a claim for a deduction or credit that is available only because of the December tax bill. This includes a number of popular credits that had expired at the end of 2005 but were retroactively reinstated for 2006 by the December tax bill. The delay applies to both e-file and paper returns, and refunds for such returns will be delayed accordingly.

1/10/2007: Release 2007.pre1 now available. An update to the original pre-release is now available. It adds the new Form 5695 (Residential Energy Credits) to the Standard and Premium Levels, revises Form 8283 to conform with the latest release from the IRS, and corrects a problem with income totals when social security benefits are entered. To install the new update or see more detail on the changes it contains, go to the Downloads page.

12/23/2006: IRS provides instructions for reporting educator and tuition/fees deductions on Form 1040. Because the recently passed Tax Relief and Health Care Act of 2006 reinstates the educator expenses deduction and the tuition and fees deduction, which no longer appear on Form 1040, the IRS has issued new instructions for reporting those deductions. Rather than just adding them to the list of deductions that can be included in line 36 of Form 1040 with a single code at that line, the IRS has defined a new, complex way of reporting the deductions. See our updated Special Report on the Tax Relief and Health Care Act of 2006. for details.

12/22/2006: IRS releases supplemental instructions for Schedule A. Because the recently passed Tax Relief and Health Care Act of 2006 reinstates the sales tax option for itemizers, and the IRS has already printed and mailed Schedule A and its instructions to taxpayers, the IRS has issued a new IRS Pub. 600 with instructions and tables for using the sales tax option at line 5 of Schedule A. The upcoming release of Tax Preparer fully reflects these supplemental instructions.

12/21/2006: NEW TAX BILL just signed into law. Congress finally passed a bill that includes the retroactive reinstatement of several expired deductions and credits. It was signed into law on December 20, 2006, far too late for the IRS packages that are sent to taxpayers and several other forms that have already been printed. This will surely cause a great deal of confusion for taxpayers because several forms will be revised and many more instructions will be revised by the IRS. For details, click here for our Special Report on the Tax Relief and Health Care Act of 2006.

10/22/2006: Another tax bill passed ... pension reform and much more. See the Fall 2006 Issue of HowardNews to get details on the Pension Protection Act of 2006. Although the main purpose of the bill was to reform the rules for pensions, the bill changes the rules for contributions to charity, and makes permanent a number of popular tax benefits that were set to expire, mostly affecting IRAs. And new flexibilities to direct deposit of your refund were added.

6/5/2006: New tax bill passed ... both good news and bad. See the Spring/Summer 2006 Issue of HowardNews to get details on the Tax Increase and Reconciliation Act of 2005. Even though it's labeled 2005 for technical (budgetary) reasons, it was not signed into law until May 17, 2006 ... once the House and Senate finally reached a compromise. The most widely- publicized parts of the bill (extending the current favorable capital gains and depreciation rules) do not come into effect until 2008 and later. Nevertheless, there are major changes for tax year 2006 as well, including further AMT relief (the good news) and a new tax hit for parents with children under age 18 but over age 13 (the bad news). Note that the well-publicized extensions of several popular credits were not included in the final bill, even though they were included in the original House bill, but a follow-up bill is expected later in the year.

Prior releases. For details on prior changes throughout the tax season, see Changes in Recent Releases for the respective software:

• Changes for 1040 (individuals) software
• Changes for 1065 (partnerships) software
• Changes for 540 (California) software

What are the changes?

Because of the convenience of the web, we issue new releases frequently, even when most of the changes are relatively insignificant. Changes are highlighted in the bottom half of the respective download pages. However, if you want more detail about the most significant changes, there are two other places to look:

• E-FILE ALERTS. Changes that are of consequence ONLY to e-file returns are documented here. The changes typically avert specific Reject Codes for the e-file return, so if your return is rejected, check this list first to see if you need to update your software and take particular steps to repair your data.
• BULLETINS. Changes that are significant for both paper and e-file returns are documented here. Technical Change Notices are issued for each significant change, including the steps you may have to take to repair a return prepared with an earlier release.

Changes that are not documented on either of these pages are less serious in nature, including rewording on some on-screen lines to make entries more understandable, correction of spelling errors, correction of line number references on printouts, and technical changes that have no affect on calculations.

IMPORTANT TIP: After you translate a prior-year return to the current-year format, be sure to VIEW ALL TRANSLATED WORKSHEETS to ensure that the worksheets are recalculated under their new format, and to verify that all entries are proper for the current return. This step is especially necessary this year because of major changes in several worksheets.