Tax Time: Congress Causes Delay for Itemized Tax Returns.
Posted: January 13th, 2011 | Author: Joe | Filed under: Taxes | Tags: Tax Returns, Tax Time, Taxes | 3 Comments »Congressional politics and a last minute game of chicken between the 111th congress and the Obama Administration has led to a delay in processing for itemized tax returns. The late passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 means late changes to the tax code and required processing on the IRS side.
Effect on filing your tax return.
This affects any taxpayer who claiming the following itemized deductions:
- State and local sales tax
- Higher education tuition and fees deduction
- Educator expenses
- Home mortgage interest
The delay will also affect tax payers who file itemized deductions on a Form 1040 Schedule A.
If your tax return falls into one of these categories, you’ll have to wait until late February before you can file your taxes – the IRS simply won’t be ready to process these returns under the new tax code before then!
According to IRS Commissioner Douglas Shulman :
“We will do everything we can to minimize the impact of recent tax law changes on other taxpayers. The IRS will work through the holidays and into the new year to get our systems reprogrammed and ensure taxpayers have a smooth tax season.”
I wonder what that’s going to cost tax payers!?
Not affected.
The majority of tax payers will not be affected by this. By the IRS’s own estimates, only about 1/3rd of all tax returns itemize the deductions causing the delay. And of course there are those who wait to the last minute to file their returns anyway, so no amount of delay would affect them.
I happen to fall somewhere in the middle. I claim some deductions that are delayed, but usually don’t file until mid-March anyway as I’ve found it common to receive late changes to tax forms until the beginning of March, and I’d rather not have to file a correction.
[...] Tax Time: Congress Causes Delay for Itemized Tax Returns. [...]
Will the delay relative to the Congressional action affect my state tax filing?
Gregg,
It could, if your state allows for any deduction based on the outcome of your federal return. It depends on the individual state, and you’re better off either waiting a few weeks or consulting with a tax pro who knows your state’s code.