More New Tax Deal Fallout

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    If you expected that tax refund fast, you might be disappointed. Last minute tax changes left the IRS a bit flat-footed. If you itemize deductions or take educator expenses or tuition and fees as an adjustment, the IRS will not accept your return, possibly until mid to late February.

    So, if you file a Schedule A (like most current or former homeowners), are a teacher in K through 12 and want to take advantage of the small income adjustment for expenses, or do not benefit from the Educational Credits as much as taking the reduction using tuition and fee expenses, the IRS will wave off your tax return. Most E-file software will be designed to prevent submission until the IRS announces it is ready to process the returns.

    As a cautionary note, if you use a preparer who tells you that you can complete these returns now for submission as soon as the IRS opens the gates, “stockpiling” is technically not allowed. A return must be filed within 72 hours of your signature. Further the IRS does not want the paper returns filed early either. If you think you can get ahead by filing paper, good luck. In reality, the processing ends up LIFO (last in first out).

    There is one workaround that will benefit some filers. They can file without these items, then file an amended return for the balance. But amended returns are famously slow; six to eight weeks to process.