has already had one result that is, well, lame: Millions of taxpayers
who usually file their returns quickly to get an early refund will have
to wait instead.
Because the law passed less than two weeks ago, the
is still scrambling to reprogram its computers to handle the income-tax
deductions extended by the last-minute legislation — a process the
agency says could take until late February.
That means at least 9 million early-bird filers
nationwide who typically itemize the deductions on their income-tax
returns will have to wait until the system is ready before they can
claim their refunds, according to
“We are hoping for a mid-February fix,”
More than two-thirds of the nearly 140 million
Americans who file federal returns each year will not be affected by
the delay, either because they take the standard
The
confusion over the tax-law changes or extensions by filing
electronically using commercial tax-preparation software or the e-file
system available through the agency’s website, irs.gov.
Tax-software vendors routinely provide customers
with updates that reflect changes in the law. Chances are the software
will be ready long before the
The tax agency is recalibrating its computers to
handle a series of tax breaks that were scheduled to expire but were
extended by the new law. Among them are the deductions for state and
local general sales taxes, which taxpayers have to list as itemized
deductions on Schedule A of their return.
The delay will also affect those claiming the deduction of as much as
Although the
Some people count on getting their annual tax refund
early in the year, so any delay in the process can hurt, especially if
the person is unemployed, behind on a mortgage or otherwise strapped
for cash, said
“The delay for those who file Schedule A (itemized
deductions) is going to be a real issue,” she said. “And certainly it
is going to cause a bottleneck the
Springer warned that the delay might prompt some
people to turn to a “refund-anticipation loan” — a sort of quick-cash
advance based on the expected size of their refund check. But such
loans carry high fees, and there are better alternatives, she said.
She suggested that people who usually itemize should
instead do their taxes early but claim the standard deduction, because
such returns are not subject to the
Later, you can file an amended return, with itemized deductions, to claim the remainder of your refund.
“There would be some minor additional cost and time
to amend the return, but it would be worth the effort if you have an
immediate need for cash,” she said.
Springer suggested all filers should begin preparing
their taxes as soon as possible, so they can be near the front of the
line, ready to file as soon as the
“The last time this happened was a couple of years ago, when
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