Small Town News

File taxes mid-February

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Following tax law changes, the Internal Revenue Service announced the upcoming tax season will start on time for most people, but taxpayers affected by three recently reinstated deductions need twait until mid - tlate February tfile their individual tax returns. In addition, taxpayers whitemize deductions on Form 1040 Schedule A will need twait until mid - tlate February tfile as well.

The start of the 2011 filing season began in January for the majority of taxpayers. However, the changes in the law mean that the IRS will need trepro-gram its processing systems for three provisions that were extended in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that became law on Dec. 17.

People claiming any of these three items ~ involving the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction as well as those taxpayers whitemize deductions on Form 1040 Schedule A will need twait tfile their tax returns until tax processing systems are ready, which the IRS estimates will be in mid - tlate February.

"The majority of taxpayers will be able tfill out their tax returns and file them as they normally do," said IRS Commissioner Doug Shulman. "We will deverything we can tminimize the impact of recent tax law changes on other taxpayers."

The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the late tax law changes. In the interim, people in the affected categories can start working on their tax returns, but they should not submit their returns until IRS systems are ready tprocess the new tax law changes.

The IRS urged taxpayers tuse e-file instead of paper tax forms tminimize confusion over the recent tax changes and ensure accurate tax returns.

Taxpayers will need twait tfile if they are within any of the following three categories:

Taxpayers claiming itemized deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes (add link tSchedule

A). In addition, itemized deductions include the state and local general sales tax deduction extended in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacted Dec. 17, which primarily benefits people living in areas without state and local income taxes and is claimed on Schedule A, Line 5. Because of late Congressional action tenact tax law changes, anyone whitemizes and files a Schedule A will need twait tfile until mid - tlate February.

Taxpayers claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students - covering up t$4,000 of tuition and fees paid ta post-secondary institution - is claimed on Form 8917. However, the IRS emphasized that there will be ndelays for millions of parents and students whclaim other education credits, including the American Opportunity Tax Credit and Lifetime Learning Credit.

Taxpayers claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up t$250. The educator expense deduction is claimed on Form 1040, Line 23 andForml040A, Linel6.

For those falling intany of these three categories, the delay affects both paper filers and electronic filers.

The IRS emphasized that e-file is the fastest, best way for those affected by the delay tget their refunds. Those whuse tax-preparation software can easily download updates from their software provider. The IRS Free File program alswill be updated.

Updated information will be posted on IRS.gov. Several other forms used by relatively few taxpayers are alsaffected by the recent changes, and more details are available on IRS. gov.

In addition, the IRS reminds employers about the new withholding tables released Friday for 2011. Employers should implement the 2011 withholding tables as soon as possible, but not later than Jan. 31, 2011. The IRS alsreminds employers that Publication 15, (Circular E), Employer's Tax Guide, containing the extensive wage bracket tables that some employers use, will be available on IRS.gov before year's end.



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