Itemized Deduction Delay for 2010 Tax Returns
In case you missed it, the IRS has decided that due to a slew of new tax laws and provisions it will have to wait until February 14th to process tax forms that include itemized deductions. That is, all itemized deductions are delayed until the IRS understands its own tax code. And a delay doesn’t have to do with paying taxes…it also has to do with getting your taxes back via refund.
Some very popular itemized deductions are the mortgage interest tax deduction, college tuition (higher education) tax deduction, as well as medical and teacher expense deductions. Generally speaking, any “Schedule A” deduction is sure to set your refund time back a few days or even weeks.
How Long is the Delay
The delay has been falsely attributed to refund checks. This is untrue; the decision has nothing to do with paying out refunds and everything to do with processing all the expected tax forms.
Most paid-preparers are ready to accept your tax paperwork for filing and submission, but they’ll have to hold any forms until February 14th–the day the IRS has decided it will accept forms with Schedule A deductions.
Those expecting a hefty refund from large medical expenses (small business owners, mostly) may have to wait until March before seeing their first dime in 2010 tax refunds. This is due mostly to the sheer number of returns that are going to hit the IRS all in one day—February 14th—when every form with schedule A tax deductions filed in the two week period between January 31st and February 14th will be sent to the IRS.
What to Do with 2010 Tax Returns
If you’re filing for any deductions, there isn’t much you can do but sit and wait. You should not delay your filing any more than you normally would.
Preferably, your 2010 tax return should be scheduled to be sent to the IRS no later than February 14th 2011.
While paid tax preparers cannot yet send your forms to the IRS, they will hold them until the IRS announces that it is ready to accept 2010 tax returns. Go ahead and file, if nothing else, you’re one step ahead of the IRS.