DEDUCING THE DEDUCTION ISSUE: BLOOMBERG.COM HAS THE ANSWER
The most simple and smart report about the current tax return issue for taxpayers who claim itemized deductions, from Bloomberg.com. Originally published January 20…
The Internal Revenue Service said it will start processing on Monday, Feb. 14, tax returns claiming itemized deductions, including for home-mortgage interest, charitable donations and state and local taxes.
The delay also affects tax filers claiming deductions for college tuition fees and for teachers’ out-of-pocket expenses. In all, about 9 million households filed returns claiming itemized or other affected deductions before Valentine’s Day last year, the IRS said in a release today.
The IRS on Dec. 23 said taxpayers seeking itemized deductions would have to wait until middle to late February to file their 2010 returns. The IRS attributed the late start of the filing season to changes in the tax law for 2010 that were finished in late December.
Congress passed and President Barack Obama signed into law an $858 billion package on Dec. 17 that extended Bush-era income tax rates for two years, through 2012. That measure also contained a series of provisions affecting tax filers in 2010, including a sales tax deduction for taxpayers in states without an income tax and the tuition and educator expenses breaks.
The IRS said the late date of enactment delayed the agency’s ability to update its processing systems and accept returns early. Most households are unaffected by the delay, the IRS said. Many taxpayers don’t file until close to the April deadline, in part because it can take time to gather documents.
Some software providers such as Intuit Inc., maker of Turbo Tax, said they are now able to accept affected returns and submit them starting Feb. 14 to the IRS for processing.
Kathy Pickering, executive director of The Tax Institute, H&R Block Inc.’s tax policy arm, said the company is similarly accepting and holding returns. In some cases, she said, if taxpayers are likely to suffer significant financial consequences from not getting refunds, the company is encouraging taxpayers to file returns now and amend them later.
For different reasons, the deadline for filing tax returns, usually April 15, will be pushed back to April 18 in 2011. That change occurs because Emancipation Day, a legal holiday in the District of Columbia, will be observed on April 15, 2011, and the two following days are a weekend.
To contact the reporter on this story: Peter Cohn in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mark Silva at email@example.com