We love the speed and ease of e-filing. When we e-file federal taxes, we enjoy getting our refunds faster and easier than ever before. Unfortunately, Congress’ schedule usually isn’t as convenient for our timetables or our pocketbooks.
In his December 23rd article, “Congress’ Delay Will Delay Tax Refunds, Too,” Kiplinger’s editorial director Kevin McCormally takes a look at the latest wrench from Washington.
McCormally explains that though the news media has made a big deal about the Bush tax extensions and estate taxes, what really will affect the IRS agents, are some Congress-ruled changes to forms and policies that received little or no media coverage.
After learning the about changes, the IRS agents scrambled hard but finally had to admit on Christmas Eve’s eve that they would not be able to apply the changes in time.
So who will be most affected when they go to e-file federal taxes?
McCormally explains that in short, the main affected filers will be those who itemize their deductions. This number totals more than 50 million filers and could encompass as many as one third of taxpayers.
Because of a previous restoration from Congress, (the choice for the filer to either deduct state sales tax or to instead deduct state income tax), the IRS needs to completely modify Schedule A on their forms and in their computer systems.
Almost all filers who itemize their deductions when they e-file federal taxes will fall into the group who will be held up. Also, the delays will not only affect itemizers; another group hindered by the changes will be teachers and their aids who don’t necessarily itemize but claim some granted deductions must also hold off their filing.
For those who claim standard deductions and therefore don’t itemize or claim, McCormally has one big suggestion. E-file federal taxes early – before the IRS starts spending their energies and time on the refunds to this later group of filers. And for those who will be affected, McCormally suggests that you just gather the forms and paperwork now so you are all ready to e-file federal taxes as soon as the IRS gives the okay.