By Jonnelle Marte
For habitually early tax filers, the start of the year means more than resolutions and a new gym membership—it marks the start of the filing season. More than 60% of Americans had filed their 2009 taxes by the end of February this year, according to a survey by the National Retail Federation. Only 15% waited until the last minute and filed in April. (Those who expect to have a tax bill, on the other hand, might not mind the delays.)
This year, getting a jump on that tax refund will be harder. Some people won’t even be able to see their updated tax forms until the middle or the end of February, while the Internal Revenue Service reprograms its systems to reflect new rules created by the recent tax law.
Most taxpayers will be fine. Delays are expected to affect just 9 million taxpayers who are claiming any of three items recently reinstated by the law, including the state and local sales tax deduction, certain education related deductions and anyone who itemizes deductions on Form 1040 Schedule A, according to the IRS.
So what is a taxpayer—especially one expecting a sizeable refund check—to do? The IRS suggests that affected taxpayers still get an early start on their returns but not submit them until they hear an announcement that the IRS’s systems are ready.
In the meantime, take care of any other tricky tax situations that might further delay your return. For instance, make sure your IRA donations are in line. If you think you’ve taken an unauthorized withdrawal from your Roth IRA, get a good grasp of what it will cost you and fill out the appropriate forms.
And small business owners should keep track of the tax breaks owed to them not just by the recent tax law, but by the Small Business Jobs Act passed this fall.
Readers, when do you normally file your tax return? Will these delays impact your tax planning?