Tuesday, January 18, 2011, AM | Leave Comment
This year you may not file your tax return in January. The filing is delayed til middle of February the earliest and the end of February the latest, according to the media report. The new tax law was passed last month, in middle of December. That not only included continuation of the Bush-era tax cuts but there were certain other provisions that had expired in 2009 and were resurrected for 2010.
In order to accommodate the new law, IRS has to reprogram software on its computers, test it and bring it out in the open. I assume, in IRS case, there can be only Alpha (internal to the organization) test. In private companies, they run Beta (external to the organization) test as well. That means millions of taxpayers have to wait some extra time to be able to file their returns.
Among those who are affected the most by the delay are taxpayers who itemize their deductions on Schedule A. Itemized deductions include mortgage interest, charitable donations, medical bills and state and local taxes. For more details, see the IRS website for Standard or Itemized Deductions.
Most taxpayers get refunds each year, and they want their money as quickly as possible. Many taxpayers would be upset who are in the habit of filing in January to be able to get the refund early. I have been one of the many who procrastinate til the middle of April to file tax return. This year I intend to file as soon as IRS says it’s okay to file.
Last year, Congress of the United States procrastinated due to Party Polarization in Congress and passed the law late in the year. If no one else, we can always blame it on Congress.
Retroactive to the start of 2010
Among the tax breaks restored and resurrected once more were certain provisions that gave IRS the reason for reprogramming its computers. Some are as follows:
- Educator-expense deduction
- Higher-education tuition and fees deduction
- Allowing millions of taxpayers who itemize their deductions a choice: They can choose to deduct state and local general sales taxes or state and local income taxes, but not both.
In a Nutshell
This year is the first year since 1971 when I moved to the States I am in a hurry to file my tax return but I can’t. I guess IRS is telling us we will not get our tax refund before its time. Looks like this year IRS has become Orson Welles and our tax returns Paul Masson wine. Watch the video.