Was The IRS Tax Extension Worth The Delay In Your Tax Return
By Sandy Phillips on February 9, 2011, 2:11 pm
The $858 billion tax legislation was signed into law by President Obama on Dec. 17, 2010, months after the tax rates are normally set and rules are distributed to tax preparers for study. As a result, tax preparers were notified that the IRS isn’t accepting itemized returns until the middle of this month. That means those who itemize and are due refunds will have to wait. Typically, itemized returns can be filed on Jan. 1 for the previous year if a taxpayer has all the necessary paperwork.
Revision Of Schedule A
Since Congress restored the opportunity for taxpayers to choose between deducting state income taxes or state sales tax, the IRS had to revise the Schedule A – the form you use to itemize your deductions. It will not be ready for use until February 14. At the same time, some of those who do not itemize their deductions are affected, too. Those who can claim the $250 deduction available to teachers and teachers’ aides who spend money for classroom supplies or the deduction for up to $4,000 of qualifed college cost can now make these claims as they were reinstated by the President when he signed the legislation last December 17.
Who Was Impacted Most
“For people in this economy who are unemployed or have lost jobs or are in a difficult financial situation and would like to file their return as soon as possible, this delay potentially has a real impact on them,” said Chad Fensermacher, a partner at Fenstermacher & Co. Certified Public Accountants in Kennett Square.
Tax Relief Act
Under the Tax Relief Act 2010, the credit percentage of Earned Income Tax Credit has been raised from 40% to 45% of the frst $12,570 of earned income for taxpayers with 3 or more qualifying children. In addition, the EITC phase-out range has also been adjusted upward by $1,880 for joint flers to eliminate any marriage penalty. This increase in percentage is
retrospective from 2009 through 2012.