Tax News & Insider Tips
Irs Gives the Go-ahead to File Tax Returns
( According to IRS Newswire on February 15, 2011)
WASHINGTON — The Internal Revenue Service announced today it has started processing individual tax returns affected by legislation enacted in December and reminded taxpayers that they can begin filing electronically immediately.
On Monday, IRS systems began to accept and process both e-file and paper tax returns claiming itemized deductions on Form 1040, Schedule A, as well as deductions for state and local sales tax, higher education tuition and fees and educator expenses.
“The IRS is now accepting all the 1040 forms,” IRS Commissioner Doug Shulman said. “We worked hard to update our systems and get the changes in place as quickly as possible. We appreciate the patience of those impacted by the delay. We urge taxpayers to use e-file with direct deposit, and they can get their refunds within days.”
In late December 2010, the IRS announced it would delay processing of some tax returns in order to update processing systems to accommodate the late tax law changes. These tax law provisions were extended by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, which became law on Dec. 17.
For the vast majority of taxpayers, the filing season this year began on time in January. Most taxpayers claiming itemized deductions and the other delayed forms file later in the year.
The IRS urged taxpayers who haven’t filed yet to use e-file instead of paper tax forms to ensure accuracy and to get refunds fast. The IRS worked closely with the tax software industry and the tax professional community during the reprogramming process to minimize disruptions for taxpayers and ensure a smooth tax season.
As a result of these efforts, many major software providers and paid tax preparers started accepting impacted returns before the Feb. 14 start date, which they held and started submitting after the IRS systems opened.
Due to the expected increase in tax return volumes being transmitted this week, the IRS cautioned a small number of taxpayers may experience a brief delay in receiving their e-file acknowledgement, which is normally provided within 24-48 hours. The IRS continues working with the software industry to minimize any impact to taxpayers.
Business taxpayers who use the 1040 series can file now as well. However, the Feb. 14 start date does not apply to non-1040 business tax forms (add link) affected by the recent tax law changes. The IRS will announce a specific date in the near future when it can begin processing those impacted business tax forms.
Updated information has been posted on IRS.gov, including Schedule A and updated state and local sales tax tables. For a complete list of affected individual tax forms and business tax forms visit www.IRS.gov.
IRS to Start Processing Delayed Returns on Feb. 14; Most People Unaffected and Can File Now
(According to the IRS Newswire on January 20, 2011)
WASHINGTON - The Internal Revenue Service plans a Feb. 14 start date for processing tax returns delayed by last month's tax law changes. The IRS reminded taxpayers affected by the delay they can begin preparing their tax returns immediately because many software providers are ready now to accept these returns, including efile411.com.
Beginning Feb. 14, the IRS will start processing both paper and e-filed returns claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917 and the educator expenses deduction. Based on filings last year, about nine million tax returns claimed any of these deductions on returns received by the IRS before Feb. 14.
People using e-file for these delayed forms can get a head start because we will accept these impacted returns immediately. Efile411.com in conjunction with 1040 will hold onto the returns and then electronically submit them after the IRS systems open on Feb. 14 for the delayed forms.
Most other returns, including those claiming the Earned Income Tax Credit (EITC), education tax credits, child tax credit and other popular tax breaks, can be filed as normal, immediately.
The IRS needed the extra time to update its systems to accommodate the tax law changes without disrupting other operations tied to the filing season. The delay followed the Dec. 17 enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended a number of expiring provisions including the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.
Efile 411 makes e-file a breeze for taxpayers affected by late tax breaks
Efile 411 in conjuction with 1040 file online tax software will hold the affected tax returns until the IRS system is ready to accept them on February 14, 2011. Our customers can go online any time and complete their tax return with full confidence knowing that their federal tax return will be e-filed automatically as soon as the IRS is ready to accept it.
Tax Season Starts on Time for Most Taxpayers; Those Affected by Late Tax Breaks Can File in Mid- to Late February
IR-2010-126, Dec. 23, 2010
WASHINGTON - Following last week's tax law changes, the Internal Revenue Service announced today the upcoming tax season will start on time for most people, but taxpayers affected by three recently reinstated deductions need to wait until mid-to late February to file their individual tax returns. In addition, taxpayers who itemize deductions on Form 1040 Schedule A will need to wait until mid- to late February to file as well.
The start of the 2011 filing season will begin in January for the majority of taxpayers. However, last week's changes in the law mean that the IRS will need to reprogram its processing systems for three provisions that were extended in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that became law on Dec. 17.
People claiming any of these three items- involving the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction as well as those taxpayers who itemize deductions on Form 1040 Schedule A - will need to wait to file their tax returns until tax processing systems are ready, which the IRS estimates will be in mid-to late February.
"The majority of taxpayers will be able to fill out their tax returns and file them as they normally ," said IRS Commissioner Doug 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."
The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the late tax law changes. In the interim, people in the affected categories can start working on their tax returns, but they should not submit their returns until IRS systems are ready to process the new tax law changes.
The IRS urged taxpayers to use e-file instead of paper tax forms to minimize confusion over the recent tax changes and ensure accurate tax returns.
Taxpayers will need to wait to file if they are within any of the following three categories:
Taxpayers claiming itemized deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes. In addition, itemized deductions include the state and local general sales tax deduction extended in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacted Dec. 17, which primarily benefits people living in areas without state and local income taxes and is claimed on Schedule A, Line 5. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.
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. This affects both 1040 and 1040A returns, Form 1040, line 34, or Form 1040A, line 19. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit and Lifetime Learning Credit.
Taxpayers claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, line 23 and form 1040A, line 16.
For those falling into any of these three categories, the delay affects both paper filers and electronic filers.
The IRS emphasized that e-file is the fastest, best way for those affected by the delay to get their refunds. As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure a smooth tax season.
Insider Tips
Frequently Missed Tax Deductions
Keeping up with new tax changes and tax deductions can be difficult. But what's more scary is that you may be overlooking some well deserved tax deductions that could affect your tax refund. That's why we have compiled a list of some frequently missed tax deductions for your reference.
Medical Related - Frequently Missed Tax Deductions
Medical transportation expenses including tolls, parking, and mileage for trips to health facilities, doctor's offices, laboratories, etc.
Nursing home expenses that are primarily for medical care
Medical aids such as crutches, canes, and orthopedic shoes
Hearing aids, eye glasses, and contact lenses
Hospital fees for services such as nursing, physical therapy, lab tests, and x-rays
Equipment for disabled or handicapped individuals
Part of the life-care fee paid to a retirement home designated for medical care
The cost of alcohol and drug abuse programs, and certain smoking-cessation treatments
Wages for nursing services
Employment Related - Frequently Missed Tax Deductions
Education expenses you paid to maintain or improve job skills
A handicapped individual's work-related expenses
Professional journals, magazines, and newspapers that are job-related
Cost of safe deposit box used for investments or business
Seeing-eye dogs for the handicapped or guard dogs for a business
Required uniforms and work clothes not suitable for street wear
Union dues
Employment agency fees or commissions in certain cases
Home office expenses, if for your primary place of business
Job-seeking expenses within your present field of employment
Reservist and National Guard overnight travel expenses
Dues to professional organizations
Business gifts up to $25 per customer or client
Business expenses including travel, meals, lodging, and entertainment not reimbursed by your employer
Cleaning and laundering services while traveling for business
Tools for use at your job
Cellular phones required for business
Half of the self-employment tax paid
Self-employed health insurance premiums
Other - Frequently Missed Tax Deductions
Student loan interest
Your moving expenses
Personal property taxes on boats, cars, ect.
General casualty and theft losses in excess of $100 and more than 10% of AGI
Property management fees
Special school costs for mentally or physically handicapped individuals
Worthless stock or securities
Fees for tax preparation or advice
Legal fees to collect taxable alimony or Social Security
Hobby expenses to the extent of hobby income you included in gross income
Not every item will be applicable to your situation. You may also find tax deductions related to your job and life events in our premium online tax preparation software.
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