DELAY IN 1040 TAX PROCESSING

Billy Thomas, CPA

Tax Filing Delayed

Yes, tax season is officially underway.  Although, some of you early 1040 filers will have to wait.  Due to the recent Tax Relief Act passed in mid-December, the IRS will need time to update the forms and its own software to adjust for the most recent tax changes.  The IRS has released a list of forms and schedules that will delay processing by the IRS due to the recent legislation.

If you are filing Schedule A with your 2010 Form 1040, processing will likely be delayed until late-February.  Clearly, this will affect many taxpayers who wish to get his or her return(s) in as soon as possible this filing season.  In addition, you can expect similar delays if you are filing or claiming any of the following:
• Form 8917, for taxpayers claiming tuition and fees deduction.
• A $250 Deduction, for elementary and secondary school teachers
• A Credit, for the D.C. First-Time Homebuyer Credit
• Form 4686, for taxpayers claiming casualty and theft losses
• Form 3800, for taxpayers claiming the General Business Credit
• Form 5405, for taxpayers claiming the First-Time Homebuyer Credit
• Form 6478, for taxpayers claiming a qualified Biofuels Credit
• Form 8834, for taxpayers claiming a qualified Electric Vehicle Credit
• Form 8910, for taxpayers claiming an Alternative Motor Vehicle Credit
• Form 8936, for taxpayers claiming a qualified Plug-In Electric Vehicle Credit

We all know April 15th is typically your last day to file your taxes and/or extensions.  We fully anticipate the IRS will iron out the processing delays mentioned above well before returns are due to be filed.  However, the IRS has extended the due date to file your return until Monday, April 18, 2011.  The change in due date relates to the D.C holiday, Emancipation Day.  Most states are following suit, including Maryland, allowing taxpayers to file their taxes timely by Monday, April 18th.  Virginia taxpayers should still plan to file their individual income tax returns and extensions no later than Monday, May 2, 2011.

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