- Days left

IRS Announces Processing Delays for 50 Million Taxpayers

The IRS is delaying taxes for 50 million taxpayers. Are you one of them?Now that the tax deal is done, we can all breathe a sigh of relief and start thinking about the upcoming tax-filing season, right?

Not so fast.

Since Congress waited so long to ink the final deal -- in the form of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, which wasn't signed into law until Dec. 17, 2010 -- tax season might start a little later for some taxpayers. The IRS has indicated that even though tax forms are available for most filers, the agency will not be able to begin processing returns as early as planned.

While IRS e-file and FreeFile for the 2010 tax season will officially open for business on Jan. 14, 2011, taxpayers who intend to itemize deductions or claim the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction will have to wait until mid to late February. That's about when the IRS has indicated it'll be ready to process those returns. The same rules apply to those taxpayers planning on filing a paper return.

How many taxpayers will be affected? Statistically, about one-third of all filers itemize their deductions. On a sheer numbers basis, that works out to about 50 million taxpayers. Several million more taxpayers who claim non-itemized deductions, such as the Higher Education Tuition and Fees Deduction and the Educator Expense Deduction that were reinstated as part of the deal, are also expected to experience filing delays.
If you're one of the taxpayers affected by the change, you can begin working on your tax return as soon as you receive your tax forms and other documents in the mail. However, you can't submit them to the IRS for processing until the IRS makes an announcement that it's accepting those returns.

Some preparers have been setting up work arounds in anticipation of the delays. Turbo Tax has announced that taxpayers who use its software will be able to e-file when ready. TurboTax promises to hold your return until the IRS begins accepting returns affected by the processing delays. You'll receive an email once the return is e-filed and accepted.

The bottom line is that if you're traditionally an early filer, you'll need to exercise a little patience this tax season. The rest of us should be fine. Doug Shulman, Commissioner of the IRS, has assured us: "The majority of taxpayers will be able to fill out their tax returns and file them as they normally do."

Let's hope so.


Increase your money and finance knowledge from home

Introduction to Retirement Funds

Target date funds help you maintain a long term portfolio.

View Course »

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

TurboTax Articles

A Tax Filing Factsheet for eBay Sellers

You can find almost anything for sale on eBay, from a piece of fine art to clippings of Justin Bieber?s hair. So it's no surprise that the IRS doesn't view all sellers alike in the online marketplace. You may not have to pay tax at all if you are essentially hosting an online garage sale, but if you run your eBay account more like a business, you should be reporting your sales to the IRS.

Tax Tips for Handymen and Odd Jobs

If you work as a handyman or do odd jobs around town for money, you are operating a business in the eyes of the IRS. Since you own your own business, you're likely a self-employed sole proprietor. This means you'll have lots of potential tax deductions to investigate.

Identity Theft: 7 Steps to Reclaiming Your Identity and Keeping it Safe

As more personal information continues to be stored online, the risk of identity theft also increases. In 2014 alone, the Bureau of Justice reported that 17.6 million U.S. residents experienced identity theft. If someone uses your personal data pretending to be you, it's a serious crime. With quick, decisive action, you can help discover the fraud, stop further damage and reclaim your identity. Here are six steps to get you on your way.

Need More Tax Time? File a Tax Extension

If you need more time to complete your taxes, file a tax extension, but don't miss out on your chance for a tax refund by not filing at all. Learn more about tax extensions from this 2012 infographic!

Add a Comment

*0 / 3000 Character Maximum