Tax filing time is here, but not so fast
It's time to gather the paperwork and prepare those 2010 tax returns. But hold the groans. While legislation and updated tax procedures inevitably result in changes, this year many of them will benefit taxpayers.
For starters, you get an extra three days to file both federal and New York state returns, and a smart phone app lets you track the status of your refund.
But the Internal Revenue Service needs a favor from taxpayers. Because the Tax Relief Act was passed in mid-December, the agency needs time to update its processing systems, so some taxpayers are asked to hold off filing until Feb. 14.
The deadline takes a holiday
April 18 is this year's deadline to postmark or e-mail tax returns.
Why? On April 16, 1862, President Abraham Lincoln signed the act that ended slavery in the District of Columbia. This year, Emancipation Day - a holiday in the nation's capital - is to be celebrated on Friday, April 15, and, by law, both federal and District of Columbia holidays can affect the regular tax filing deadline.
Smartphone app can track a refund
The IRS is getting on the mobile bandwagon with a new app allowing taxpayers to get tips and check the status of their refunds.
All you do is enter your Social Security number - the IRS says it's "masked and encrypted" - then pick your filing status and enter the amount you expect to get back.
Those who e-file should have access to the information about 72 hours after getting an e-mail notification saying their returns have been received.
If you itemize, file after Valentine's Day
Some taxpayers are being asked to hold off filing until Valentine's Day to allow the IRS to finish reprogramming its computers. Those who do not itemize or who take standard deductions can file right away, says Joel Redler, volunteer coordinator for the Town of Hempstead's Volunteer Income Tax Assistance program, which provides free tax preparation services for seniors. But those affected by the wait request include:
Those claiming itemized deductions, such as mortgage interest or charitable deductions, on Schedule A.
Those claiming the higher-education tuition and fees deduction on form 8917.
Kindergarten-to-12th grade educators claiming the educator expense deduction for up to $250 of out-of-pocket classroom expenses.
For further details, see irs.gov.
Debit card pilot program
About 600,000 low- and moderate-income taxpayers who were sent invitation letters the week of Jan. 14 from the U.S. Department of the Treasury can choose to participate in a pilot program to receive their tax refunds on prepaid debit cards.
Carolyn McCormack, director of education at SafeGuard Credit Counseling Services Inc. in Hauppauge, says getting a refund that way could be useful as long as the recipient has a plan and doesn't use the card impulsively.
No more H&R BLOCK refund loans
Taxpayers who have returns prepared by H&R Block Inc. will not be able to opt this year for refund anticipation loans backed by their expected tax refunds. That's because the Office of Comptroller of the Currency ordered Block's banking partner, HSBC Bank, to stop offering the loans. Still, Block, the nation's largest tax preparation company, said it will continue to offer a similar product -- refund anticipation checks. Other tax preparers offering refund loans are not affected.
The big news is that anticipated major changes that could have come about didn't, as Congress extended those expiring Bush-era tax cut provisions, said Arnie Haskell, a tax partner at the Holtz Rubenstein accounting firm in Melville.
An exception is that in the 2009 tax year, filers would have been excused from paying taxes on the first $2,400 in unemployment benefits they received. But this year filers owe taxes on the full amount they received in 2010. Learn more at www.irs.gov/newsroom