2010 Tax Law Changes: Who do they affect and when can I file?

2010 Tax Law Changes: Who do they affect and when can I file?

On December 17, 2010, new tax laws changes were passed that have delayed when some can file their federal returns. Congress reports that these laws do not affect most tax payers, but if you are an elementary or secondary school teacher, or if you paid higher education tuition and fees in 2010, the new tax laws do affect you. This year, because of these changes, the IRS is actually encouraging tax payers to e-file to speed up the process and help ensure an accurate return. Many forms will not even be available from the IRS till sometime in mid-February 2011. Those who are not affected by the changes can begin e-filing their tax returns on January 14, 2011, using either the IRS web site or online tax software.

 

Who do these new 2010 tax laws affect?

 

  • Those who need to file a Schedule A. New tax laws require the IRS to update this schedule.
  • Elementary and secondary school teachers who need to deduct for supplies they bought for classroom use (up to $250) which were not reimbursed by the school district. (See IRC   62(a)(2)(D)).
  • Taxpayers who paid higher education tuition and fees in 2010 (Form 8917).
  • Those that need to claim a casualty or theft loss (Form 4686).
  • First-time homebuyers in the District of Columbia.

Other forms currently being revised:

  • Form 3800, General Business Credit
  • Form 5405, First-Time Homebuyer Credit and Repayment of the Credit
  • Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit
  • Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit
  • Form 8910, Alternative Motor Vehicle Credit
  • Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit

If the tax laws affect me, when can I file?
The IRS is reporting that these updated forms should be ready in mid-February. One of the reasons e-filing through services like TurboTax is a good idea is that Intuit can instantly react to the new forms, allowing you to submit your return as soon as possible and as accurately as possible.

Other important dates to know:

  • April 15th, 2011: Filing deadline for state tax returns and for filing a federal tax extension by e-file.
  • April 18th, 2011: Due date for federal tax returns, changed from the traditional April 15th due date.
  • October 17, 2011: Last day to e-file a 2010 federal return or late file.
  • October 20th, 2011: Last day to prepare and print an e-file; no e-filing will be accepted after this date.

Additional areas affected by IRS changes:

  • Child-related expenses such as adoption, investment income, child tax credit and the definition of a qualifying child
  • COBRA assistance
  • Decrease in personal casualty and theft loss limit
  • Deduction for new motor vehicle taxes, for new cars purchased between February 16, 2009 and January 1, 2010
  • Increase in earned income credit amount
  • Education-related expenses
  • Archer Medical Savings Accounts (MSAs), Health Savings Accounts(HSAs), and long-term care premiums
  • Farming and fishing income
  • Settlements from Exxon Valdez litigation
  • Increase in long-term care and death benefits
  • Increased standard deduction for some
  • Limit on itemized deductions
  • Transportation fringe benefits
  • Retroactive service-connected disability rating by the VA for retired service persons
  • Decrease in standard mileage rating for business, medical and move-related expenses

Tax laws change every year; however, this year late 2010 tax law changes have delayed the filing date for many tax payers. This year, e-filing is the best option for many, since it can create accurate returns that take into account all new tax laws, and it is the fastest way to get your return to the IRS. In fact, you can receive an acknowledgment from the IRS within 48 hours.

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