01/01/2011

Congress waited until the LAST POSSIBLE MOMENT to act on the Bush tax reduction extenders and other tax relief legislation recommended by the Obama Administration.  The President signed the new legislation into law on December 17 .   This has put a wrench in the works for virtually 100% of our clients.  We are going to be late this year — see below, a note from our software provider AND the Internal Revenue Service:

“The IRS has announced that it will need time to reprogram its processing systems for the three provisions that were extended with the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.  Specifically this means that anyone claiming the state and local sales tax deductions, higher education tuition and fees deductions, educator expense deductions, or any taxpayer that itemizes deductions via a Schedule A, will need to wait to file their tax returns until the processing system is ready, which the IRS projects will be completed in mid- to late February.”

More specifically, the IRS has informed us that we will NOT be able to file a tax return until they tell us we can file — maybe mid to late February.  I’m sure that the IRS and our software company are NOT having a Happy New Year — they are all toiling away day and night to update forms and software because Congress could not make up its mind.

Over the next few days, I’ll blog/outline some of the changes that are going to impact us all.  But right now — everyone who itemizes their deductions (99% of our clients) will not be able to file until the IRS says it is OK.   Sigh.  Not the IRS’s fault, nor ours.  The IRS has, however, given us until April 18 to file this year due to Emancipation Day, a holiday in Washington DC.   So, an extra weekend.  Be aware though, MOST states, including Colorado, will NOT recognize the additional 3 days to file…so if you owe money to your state…get it in by April 15, which is a Friday.