An “Extra” Day for Tax Filing?

That’s because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. The IRS notes that, by law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; “therefore, all taxpayers will have three extra days to file this year” (and yes, taxpayers requesting an extension will have until October 17 to file their 2010 tax returns).

The IRS expects to receive more than 140 million individual tax returns this year, with most of those being filed by the April 18 deadline.

Some of those looking to get an early start may have to cool their heels.  The IRS notes that tax law changes enacted by Congress and signed by President Obama in December mean some people need to wait until mid- to late February to file their tax returns in order to give the IRS time to reprogram its processing systems. 

According to the IRS, those who need to wait to file include:

• 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 to Schedule A). In addition, itemized deductions include the state and local general sales tax deduction that was also extended and which primarily benefits people living in areas without state and local income taxes. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.
• Taxpayers Claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students – covering up to $4,000 of tuition and fees paid to a post-secondary institution – is claimed on Form 8917. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit extended last month and the 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 to $250. The educator expense deduction is claimed on Form 1040, Line 23 and Form 1040A, Line 16.

The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the recent tax law changes. It noted that, in the interim, “taxpayers affected by these tax law changes can start working on their tax returns, but they should not submit their returns until IRS systems are ready to process the new tax law changes”.

Note also that this is the first filing season that tax packages will not be mailed to individuals or businesses (though, since last year the IRS notes that only 8% of individuals who filed tax returns received tax packages in the mail, most of us have already experienced that change). Taxpayers can still get any forms and instructions they need online at www.IRS.gov, or they can visit local IRS offices or participating libraries and post offices.