Late Tax Breaks Cause Delay to File - Mid- to Late February

[Jesse]

http://www.irs.gov/newsroom/article/0,,id=232773,00.html

Forms Affected By the Extender Provisions

Taxpayers will need to wait to file if they are impacted by any of the tax credits or deductions that expired at the end of 2009 and were renewed by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacted Dec. 17. The delays impact taxpayers claiming:

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

A few other taxpayers will also need to wait to file, due to the impact of other recent changes, primarily some of those included in the Small Business Jobs Act of 2010. Affected forms include:

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 DriveMotor Vehicle Credit

The delay affects both paper and electronic filers. All tax returns claiming these credits or deductions should not be filed until the IRS is ready to start processing these returns in mid- to late February. IRS e-file is the fastest, best way for those impacted by the delay to get their refunds.

[Gretel]

Oh my gosh! So now I can take a vacation in January!

Schedule A not to be filed until the end of February, how much worse can it get.

Thanks for posting, Jesse.

[joanmcq]

The IRS warned about this, but Congress couldn't get their butts in gear. It gets worse every year. And then we or the IRS gets blamed.

Oh well, I guess I can still file my EZs, as long as they aren't taking tuition deductions.

[BOB W]

Needless to say, it is impossible to hold off appointments until all forms are ready. That is not going to happen. The problem will be re-accessing and recalculating every return that is on hold. AND then printing the client copy and getting the 8879 signed, all while new appointments are coming in and processing them.

I do a little over 225 returns in February, almost all have a schedule A to say the least of the forms I do for them. To Elf each return when the client leaves my office takes no time at all. Now, I could spend all day Sunday(s), no appointments on Sunday, to get ?????? sent out in March when the forms are ready.

I can't bill the client for this problem, but I have to raise my general fee somewhere across the board.

[Jiggers]

IRS sends Christmas Greetings......

According to theIRS, doesn't "mid- to late February" usually mean "late February to mid March" for us?

[taxxcpa]

Late filing

I can start a return as soon as I get part or all of the information, then all I have to do is wait until March to transmit them to the IRS.
The only problem is that I will need to prepare a worksheet listing what I still need to enter if my tax program does not yet have a place to enter some of these items.

[JohnH]

I think I'm going to set my drop dead date for extensions as March 10 this year, just to be on the safe side. For many years I used March 20, but for the past few tax seasons it seems there's another good reason to move it earlier in the month. Anybody coming in after Mar 10 automatically gets an extension and then we'll see how the rest of the season shakes out. Doesn't make sense to allow Congress's procrastinating to cause us more difficulty that is necessary.

[taxxcpa]

Extensions

I think I'm going to set my drop dead date for extensions as March 10 this year, just to be on the safe side. For many years I used March 20, but for the past few tax seasons it seems there's another good reason to move it earlier in the month. Anybody coming in after Mar 10 automatically gets an extension and then we'll see how the rest of the season shakes out. Doesn't make sense to allow Congress's procrastinating to cause us more difficulty that ins necessary.

I think I will submit an extension request for all clients on Jan 1. (don't take me seriously)

[AJsTax]

I do not anticipate reprinting....

Needless to say, it is impossible to hold off appointments until all forms are ready. That is not going to happen. The problem will be re-accessing and recalculating every return that is on hold. AND then printing the client copy and getting the 8879 signed, all while new appointments are coming in and processing them.

I do a little over 225 returns in February, almost all have a schedule A to say the least of the forms I do for them. To Elf each return when the client leaves my office takes no time at all. Now, I could spend all day Sunday(s), no appointments on Sunday, to get ?????? sent out in March when the forms are ready.

I can't bill the client for this problem, but I have to raise my general fee somewhere across the board.

I am quite sure our software will be up to date long before the IRS will be able to accept those returns and will not require reprinting anything. the client copy and the 8879 will be done during the Feb appointments and then released when the IRS is ready. This will not involve any more contact with those clients..

[Burke]

I think we should all petition our congressional representatives, as well as the IRS taxpayer advocate, to go to bat for us to require extension of the filing season deadline to 5/1 as part of the new bill whenever they fail to pass tax laws (that affect the current year) by 10/15.

[taxxcpa]

Deadline

I think we should all petition our congressional representatives, as well as the IRS taxpayer advocate, to go to bat for us to require extension of the filing season deadline to 5/1 as part of the new bill whenever they fail to pass tax laws (that affect the current year) by 10/15.

----
Years ago the deadline was March 15 which really rushed things. Now with all the complications and delays, they should up it to May 15 or maybe June 15 and let the filing season begin in February or March.
Every year it gets worse about what to extend and what not to extend. We need about a month after the laws are firmed up just to get up to speed with all the things that changed or did NOT change.

When I answer a client's inquiry, I warn them that anything I say might change the next time congress is in session.

[Duane Anderson]

File with Standard Deduction

An option would be to file the return using the standard deduction and later file an amended return to get all the $ available in Schedule A.....I have several clients who need cash and filing this way at least would get them some money sooner ! But, I am not a big fan of amending returns either. But it is not fair to have to wait until mid February when it is $ they are entitled to .

[taxxcpa]

Unfair?

But it is not fair to have to wait until mid February when it is $ they are entitled to .

It is not the government's fault that they had excess withholding. And if they are getting an EIC then it is more than fair if they ever get it at all.

[erchess]

Soooooo

Can a single mother with nothing but wages, EIC, Child tax credit and Child Care Credit plus NC efile on 1/15 if she has her W-2s? I have not seen anything to suggest otherwise.

[Snaggletooth]

Great Idea But

I think we should all petition our congressional representatives, as well as the IRS taxpayer advocate, to go to bat for us to require extension of the filing season deadline to 5/1 as part of the new bill whenever they fail to pass tax laws (that affect the current year) by 10/15.

I love this idea, but given the mindset of Congress, why would they? My friend Burke proposes a flexible filing date whenever "they fail" to meet a hypothetical deadline.

Even if they passed such a thing would it rush their December agenda? Our elected officials are oblivious to such things, and who is it that would feel the effect even if this were law?

There are things that they care about, but this is not one of them. For example, one of the things that provoked them to finally legislate during Christmas week and go home was the threat of eminent increased withholding on 190,000,000 workers which would have occurred on January 1 if they didn't get off their butts and get something done.