As in previous years, the 2011 tax filing season begins in January for most individuals but about 9 million taxpayers will have to wait longer to file. The Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 made some sweeping tax changes with three tax deductions becoming valid again. Specifically, the state and local sales tax deduction, higher education tuition and fees deductions and the educator expenses deduction became effective again. Changes made to tax laws will require that individuals affected by one or more of the three tax deductions that were recently reinstated will need to wait until mid or late February to file their tax return, as will people who itemize tax deductions using Form 1040 Schedule A.
Do You Need to Wait to File Your Tax Return?
If any of the following apply to you, then you’ll want to wait until February before 14th submitting your tax return – however, you can start compiling the information you need to file now and just hold off on submitting until the updates are complete:
- Taxpayers Itemizing Deductions on Form 1040 Schedule A: if you are itemizing things like mortgage interest, medical expenses, charitable contributions – you’ll need to wait to file.
- Taxpayers Itemizing State and Local Sales Taxes: if you are itemizing deductions under the extended Tax Relief, Job Creation Act of 2010, or Unemployment Insurance Reauthorization deductions, you’ll need to wait to file because Congress was late to extend these deductions.
- Taxpayers Claiming Higher Education Tuition and Fees Deductions: if you are claiming up to $4,000 of tuition and educational fees as a parent or student on Form 8917, you will need to wait to file. Other educational credits, such as the Lifetime Learning Credit and American Opportunity Tax Credit will not be delayed.
- Educators Claiming the Educator Expense Deduction: for teachers of kindergarten through 12th grade claiming out-of-pocket expenses for their classroom up to $250, on Form 1040, Line 23 or Form 1040A line 16, you’ll need to wait to file.
What If I E-File? Do I Still Need to Wait?
Even if you are e-filing your tax return but you are itemizing on Form 1040 Schedule A, or you are taking advantage of one of the three tax deductions mentioned above, it is still a good idea to wait until February 14th.
What If I Didn’t Know and I Already E-filed?
Most tax software providers have been working closely with the IRS in order to ensure the least amount of problems for filers. Many tax filing software providers like TurboTax will be holding the tax returns of those taxpayers itemizing deductions and then will submit them to the IRS once the Internal Revenue Service systems are ready. If in doubt, give them a call but in all cases avoid not filing at all as an unfiled Federal tax return will only cause more problems for you. If you are using a tax professional, just make sure to check with him/her if you feel you will be impacted by these delays.