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IRS Announces Feb 14 Date to Start Processing Delayed 2010 Returns

Happy Valentine's Day! Following the recent tax law changes, the Internal Revenue Service announced that taxpayers affected by three recently reinstated deductions need to wait until February 14th to file their individual tax returns. IRS Announces Feb 14 Date to Start Processing Delayed 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 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. 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. 

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. 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.

Source: IR-2010-126, Dec. 23, 2010