February 1, 2011
The massive tax package passed late in the last session of Congress will cause delays for many taxpayers filing their tax return this year. By passing the law at the 11th hour, Congress left the IRS in a time crunch to reprogram its processing systems to accommodate returns reflecting the changed provisions. The new tax package generally renewed George W. Bush-era tax cuts that would otherwise have expired.
The following forms and schedules are affected by the programming delay:
Schedule A (Form 1040), Itemized Deductions
Form 8917, Tuition and Fees Deduction
Educator Expense Deduction claimed on Form 1040, Line 23, and Form 1040A, Line 16
Form 4684, Casualties and Thefts
Form 8859, District of Columbia First-Time Homebuyer Credit
Form 3800, General Business Credit
Form 5405, First-Time Homebuyer Credit and Repayment of the Credit
Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit
Form 8834, Qualified Plug-In Electric and Electric Vehicle Credit
Form 8910, Alternative Motor Vehicle Credit
Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit
The IRS is expecting to start processing the affected tax returns on February 14th. To compound the delay many financial institutions are requesting an extension to mid to late February for releasing 1099 forms to taxpayers. This delay will really condense the tax preparation season as we are losing about a month of processing time. I would expect that most tax preparation offices will be busier than ever in March and April. So, my advice here would be to make your tax appointment as early as possible this year to avoid the expected end of season delays.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).