With the filing season well underway, the IRS is estimating that more than 144 million individual tax returns will be filed this year - some 4 million more than last year - and it expects to receive most of them by the April 17 deadline.

Of last year's tax returns, nearly 80 percent were electronically filed, and that rate is projected to increase substantially as more preparers (all those who file 11 or more individual returns) are required to file electronically.

"W-2s were out a little earlier than in prior years, and last year we couldn't file Schedule A until mid-February," said John Hewitt, president of Liberty Tax Service. "So our volume is a little higher than last year at the same point in the filing season."

Although the number of banks offering refund anticipation loans has declined, Liberty currently offers them in 44 states. "We offer state-sanctioned consumer loan products in the other six states," Hewitt explained.

Some corporate forms were released a bit late, pointed out Mark Luscombe, principal analyst at CCH, a Wolters Kluwer business. "There was some concern that it was causing some problems with some filers."

There are a number of changes for the 2012 filing season that impact conversations between taxpayers and their preparers, Luscombe explained. "Those who did Roth conversions in 2010 had the option to spread the tax between 2011 and 2012," he said. "This is the first year to pick up taxes on the conversions, and some people won't necessarily remember that something they did in 2010 will affect the returns they file in 2012."

For 2010 conversions, only half of the resulting income must be included in income in tax year 2011, and the other half is reported in 2012 (on 2013 returns), unless the taxpayer elected to include all of it in income for 2010. For conversions made in 2011, all of the income resulting from the conversion must be reported on the 2011 return.

FORM CHANGES

"There were a couple of changes to basis reporting that will impact returns," Luscombe said. "Form 1099-B has been revised to show the broker reporting of basis, so taxpayers have to make sure that what they report on Schedule D and on Form 8949 conforms with what's being reported to the IRS on Form 1099-B."

Form 8949, a new form, is used to report capital gain and loss transactions. Schedule D, the form traditionally used to show these individual transactions, is now used as a summary sheet, reporting amounts for total sales price, basis and other adjustments. For securities both bought and sold in 2011, Form 1099-B will show the basis, according to the IRS.

Another new form, Form 8938, is for reporting foreign financial assets, Luscombe said. "This is the first year that this reporting has been required," he noted. FBAR -Form TD F 90-22.1, which has been around for several decades - is a separate filing requirement. Unlike the FBAR form, Form 8938 is attached to a taxpayer's income tax return, and individuals who do not have an income tax return filing requirement do not have to file it.

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