NEW YORK (MainStreet) — The Internal Revenue Service is still days away from being able to begin processing most 2012 individual income tax returns — Jan. 30. This applies to electronically as well as paper-filed returns.
The delay is a result of the tax law changes for 2012 from the American Taxpayer Relief Act of 2012, passed by Congress at the beginning of January. Among these changes are the Alternative Minimum Tax “patch” and the extension of temporary popular tax benefits such as the deduction for educator expenses and the option to deduct state and local sales taxes. The IRS needs additional time to update forms and complete programming and testing of its processing systems.
The IRS will not be able to start processing returns that include depreciation deductions, passive activity losses, residential energy credits and general business credits until late February or early March because of the need for more extensive form and processing systems changes. This includes taxpayers whose Form 1040 includes a Schedule C for self-employment income and Schedule E for rental income and income from “pass-through” business entities.
A full list of the forms and schedules the Service will not be able to process until February or March is available on the IRS website.