So now that members of Congress (and President Obama) are patting themselves on the back after their 11th hour tax deal, the real work begins: the IRS and tax professionals get to explain for the next month and a half why they can’t actually start processing your taxes on time. That’s because even though they had ten years to straighten the tax mess out, Congress approved a tax deal (with some bits retroactive for 2010 filers) at the last.possible.minute.
The idea that the IRS could just throw together some last minute changes on some forms in a couple of weeks is laughable. We knew it. Congress knew it. IRS Commissioner Shulman knew it.
But now we’re all pretending it’s okay because, you know, we have a tax deal.
However, Congress’ delay in getting its collective act together means that tax season will not start on time for many taxpayers. Officially, tax season kicks off on January 14, 2011: that’s when e-file opens and when Free File becomes available. However, taxpayers who itemize deductions on their federal form 1040 Schedule A or who intend to claim the state and local sales tax deduction, higher education tuition and fees deduction or educator expenses deduction will have to wait until mid to late February to file.
Shulman said about the delay:
The majority of taxpayers will be able to fill out their tax returns and file them as they normally do. 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.
About one-third of all filers itemize (that works out to about 50 million taxpayers) and several million more are expected to claim those non-itemized deductions which were reinstated.
If you’re affected by the change, you can begin working on your tax return as soon as you receive your forms 1099, W-2 and the like. You just cannot submit them to the IRS for processing until IRS issues the “all clear” for those returns. The delay will affect returns filed by paper and electronically.
Expect a few bounced returns. The IRS is gonna love that. As are paid preparers. You’ve been warned.
My advice? If you’re one of those taxpayers who files early, plan on exercising a little patience this year. Don’t yell at your tax preparers. And don’t shriek at the IRS. They had nothing to do with the delays and they’re working as hard as they can to get through tax season, just like you. Deep breaths.
And if you really, really want to scream at someone, try your Congressperson…
Thank you for pointing out that this delay is soley to blame on congress, not the IRS or tax preparers. Believe me, nobody wants tax season to go smoother than those people.