Deductions Delayed by IRS Due to Late Legislation

Due to the late passage of legislation and changes to IRS regulations, the IRS has announced that Federal individual income tax returns that include the following forms will not be ready to be processed electronically by the IRS until mid-to-late February, 2011:

• Itemized deductions on Schedule A – This is due to the state sales tax deduction that was extended
• Tuition and Fees Deduction on Form 8917
• Educator Expense deduction claimed on Form 1040, line 23 or Form 1040A, line 16
• First-Time Homebuyer Credit on Form 5405
• Alternative Motor Vehicle Credit on Form 8910
• General Business Credits on Form 3800
  
  

What Does This Mean For You?

1. You can still use Taxbrain.com to prepare and file your return.
2. When e-file opens on January 14, 2011, returns that include at least one of these deductions or credits will not be allowed to be filed electronically until the necessary changes have been made to the IRS tax processing system.
3. If you try to e-file a return that contains any of these forms, it may result in your return being rejected by the IRS.
4. It is important to note that during this period of time, the IRS will also be unable to process paper returns that include the affected items. Filing a return by mail instead of waiting to e-file will only result is a greater delay of processing your return.
   

What We Recommend

1. If your tax return does not include any of the affected form, prepare and e-file on Taxbrain and get your refund in as little as 8 days.
2. If your return does include any of the affected forms – no problem!
   a. Login to Your Taxbrain Account or Create a FREE Account
   b. Answer our brief questionnaire
   c. Complete your worksheets & Calculate & Submit Your Refund
   d. If you have attempted to e-file any of the affected forms, the IRS will send back a notice, which you can view in your Taxbrain return status page.
   e. Once the IRS has updated the e-file rules for these forms, you’ll be able to login to Taxbrain and resubmit your return, it’s that simple!

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Vincent Mangiapane, EA
Qualified Professional, Taxbrain Online Tax Service