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CPA in Wilmington comments on delayed Form 1040 filing | IRS must update tax forms

Wilmington NC CPA tax accountant discusses delay in 2011 Form 1040 filing

Gary Bode, CPA: if you'd like a free initial consult with a Wilmington NC tax accounting firm, please consider calling us at (910) 399-2705.

IRS.gov announced that it was caught unprepared for the three tax provisions re-insituted by Congress on December 17th

UPDATE:  IRS began accepting some of these returns, at least by E-File, on Valentine’s Day 2011.  But because of the expected backlog, they rationed acceptance, at least to some of the major software packages.  And some of North Carolina Department of Revenue’s forms still aren’t finalized.  Like NC 401S.  This doesn’t really decrease the tax preparation window, it  just delays filing.  But this year, more than most, demonstrates how dynamic individual and small business tax preparation has become.  A myriad of minor changes plus some  major revisions. 

But if the roles were reversed, the IRS and NC DOR might not be as understanding of us being delayed?

Because IRS tax forms have to be updated, taxpayers who utilize these provisions must wait until at least mid February to E-File Form 1040.  One of these provisions, the state and local income tax deduction, is reported on Schedule A with other itemized deductions, so apparently all folks who itemize will also have to wait.  The IRS is also urging these folks to E-File to avoid confusion.

The three re-instated IRS tax provisions are;

  • State and local income tax deduction.  This is a long standing itemized deduction in the Taxes Paid section of Schedule A. 
  • Higher Education Tuition and Fess Deduction reported on IRS tax form 8917.  This allows deduction of up to $4,000 of tuition and fees paid to a qualified post secondary educational institution.
  • Educator Expense Deduction.  During tax preparation, this is claimed on line 23 of Form 1040 as an adjustment to (off) Gross Income.

If you’d like a gratis initial consult with a tax accountant in a Wilmington NC CPA firm, please call us at (910) 399-2705.

Of course, every taxpayer wants to generate a tax refund.  So,tax preparation ofForm 1040 without these deductions, if you qualify, is silly.  Just wait for the updated tax forms.  But it does shorten the tax preparation season.  The IRS continues its push taxpayers to E-File.  The IRS is also extending the E-File deadline to April 18th by recognizing Emancipation Day, a Washington DC holiday.  This falls on Saturday April 16th, so it is celebrated Friday the 15th.  When an IRS deadline falls on a Friday, it is moved forward to the following Monday.

Here’s the actual IRS blurb:

  • 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. In addition, itemized deductions include the state and local general sales tax deduction extended in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacted Dec. 17, which primarily benefits people living in areas without state and local income taxes and is claimed on Schedule A, Line 5. 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 and 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.

CPA Wilmington NC.  Accounting Wilmington NC.  Tax preparation Wilmington NC.   Accountant Wilmington NC.

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