Delay for Filing Tax Returns


The IRS has advised that many taxpayers planning to file their 2010 tax returns early will have to wait until mid to late February, 2011 before they can file. Taxpayers whose filing will be delayed are those planning to file Schedule A, or claim above-the-line deductions for higher-education tuition and fees or educator expenses.

The reason for the delay is because of the late passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the "2010 Tax Relief Act") which President Obama signed into law on December 17, 2010. The IRS said it needs time to reprogram its computers to reflect the 2010 Tax Relief Act's changes.

Taxpayers affected by the hold-up are those claiming:

(1)     Itemized deductions on Schedule A. What's holding things up is the choice to deduct state and local general sales and use taxes instead of state and local income taxes. This election was extended for 2010 and 2011 by the 2010 Tax Relief Act. Because of late Congressional action to enact tax law changes, IRS says anyone who itemizes and files a Schedule A will be affected.

(2)     The above-the line deduction for higher education tuition and fees. This deduction of up to $4,000 of tuition and fees paid to a post-secondary institution is claimed on Form 8917. The IRS stated that there would be no delays for taxpayers claiming other education credits, including the American Opportunity Tax Credit and Lifetime Learning Credit.

(3)     Educator Expense.  The above-the-line deduction for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250.

Those taxpayers affected by the delay are told to wait until mid- to late-February, 2011, to file their individual returns. IRS said it will announce a specific date in the near future when it can start processing tax returns impacted by the late tax law changes.