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Some Taxpayers Cannot File with IRS until Late February 2011

New Tax Law Means Some Cannot File with IRS until Late February 2011

People who itemize deductions on Form 1040 Schedule A, or who claim the state and local sales tax deduction, higher education tuition and fees deduction or educator expenses deduction will not be able to file their federal income tax returns until mid- to late February 2011.

The delayed filing date is because of the tax law changes enacted in December. The IRS needs the extra time to reprogram its computer systems for three provisions that were extended in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that became law on December 17, 2010.

This does not mean you should delay gathering your tax documentation, however, since in many cases, we can have your returns completed and ready to file when the IRS systems are ready to process them. Please note that the delay applies to both electronic filing and paper filing.

The IRS will announce the date it can begin processing tax returns affected by the late tax law changes sometime in the near future. If you fall into any of these three categories, the IRS will be unable to accept your return until their system is updated:

1. Taxpayers claiming itemized deductions on Schedule A, including mortgage interest, charitable deductions, medical and dental expenses, and state and local taxes.
    
2. Taxpayers claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students covering up to $4,000 of tuition and fees paid to a post-secondary institution is claimed on Form 8917. However, there will not be a delay for many other parents and students who claim other education credits, including the American Opportunity Tax Credit and Lifetime Learning Credit.
    
3. Taxpayers claiming the Educator Expense Deduction, which is for kindergarten through grade 12 educators with out-of-pocket classroom expenses up to $250. The educator expense deduction is claimed on Form 1040, Line 23, and on Form 1040A on Line 16.

Please call us if you have any questions about this change in the tax law. And remember, don’t delay gathering your tax documentation. We can begin preparing tax returns once we receive your information.