The Internal Revenue Service has announced that taxpayers affected by three recently reinstated deductions — those involving higher education tuition and fees, educator expenses and state and local sales taxes — as well as those who itemize deductions on Form 1040 Schedule A will need to wait until mid- to late February to file.
Tax law changes approved on Dec. 17 as part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 will require the IRS to reprogram its processing systems, officials announced.
Taxpayers will need to wait to file if they are within any of the following three categories:
- 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.
- 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 teachers with out-of-pocket classroom expenses of up to $250.
For those falling into any of these three categories, the delay affects both paper filers and electronic filers. However, the IRS emphasized that e-file is the fastest, best way for those affected by the delay to get their refunds. The agency recommends electronic filing for all as a way to minimize confusion over recent tax changes and ensure accurate tax returns.