Information, News and Updates for Business Owners

What You Need to Know About Filing Your 2010 Taxes

  

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For many taxpayers who are hoping to get a fast refund this year, that may not be possible.  Congress, in December, passed the Unemployment Insurance Reauthorization and Job Creation Act of 2010.  As a result of the bill that was passed and signed into law, the IRS needs to reprogram its processing system to accommodate three provisions contained in the law. 

Becuase of this, taxpayers that itemize their deductions will not be able to file their taxes until mid to late February.  Taxpayers, where the total amount of itemized deductions exceeds the standard deductions ($11,400 for married couples and $5,700 for single filers), are the ones that will be affected.  This applies to you, if you own a home and write off the mortgage interest on your taxes.  

The impact to you, is it will delay how quickly you can get your refund.  If you cannot file until late February, most likely you will not see a refund check until sometime in March.   

The law affects three categories:

1. Taxpayers itemizing deductions on the Schedule A.  This includes taxpayers who use the mortgage interest deduction, charitable contribution deduction, medical and dental deduction or real estate tax deduction.
2. Taxpayers claiming the Higher Education Tuition and Fees Deduction.  This deduction is for parents and students and covers up to $4,000 of tuition and fees to post-secondary institutions.  There will be no delays for parents and students who claim other educational tax credits such as the American Opportunity Tax Credit and Lifetime Learning Credit.
3. Taxpayers claiming the Educator Expense Deduction.  This deduction is for K-12 grade educators with out-of-pocket expenses of up to $250. 

If you are a taxpayer that falls into any of these three categories, and want to claim these deductions, you will have to delay your tax filing until the IRS updates its processing system.  As soon as they make that date available we will update this post.   

This should not stop you from visiting your CPA and having them prepare your taxes.  You will want to make sure that they are prepared ahead of time and only need to be transmitted.  Delaying the preparation of your taxes will only further delay, how quickly you can get your refund.