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2010 Itemized Deductions Approved For E-File Tax Returns

Taxpayers filing 2010 tax returns no longer need to wait to claim their 2010 itemized deductions. As of February 14, taxpayers who itemize their Federal tax deductions on Schedule A, or plan to take certain recently extended deductions specified below, may now electronically file a tax return claiming all Federal tax deductions which they are eligible for. Rapid Filing Services is now E-Filing all 2010 tax returns including itemized deductions which have been submitted to us previously, and we invite our customers to submit any new tax returns including itemized deductions.

Due to the December 17th enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Small Business Job Creation Act of 2010, the IRS required additional time to update the appropriate forms and reprogram its computer systems to handle specific items. The delays caused by this change took from the start of the tax filing season until mid-February, but they have now been resolved and the IRS’ systems are updated to handle the late changes to 2010 itemized deductions.

Notably, Form 1040 Schedule A has been refreshed to reflect the extension of the state and local general sales deduction. In addition, the state and local tax tables used in the calculation of the deduction have also been updated.

Taxpayers affected by the delay, in addition to those itemizing on Schedule A, were:

  1. Filers claiming the higher education tuition and fees deduction as listed on Form 8917.
  2. Educators claiming the $250 deduction for elementary and secondary school expenses on classroom supplies following the reactivation of the 2010 Tax Relief Act.
  3. Taxpayers taking the allowance for tax free distribution from their individual retirement plan for charitable purposes.
  4. Those claiming casualty or theft losses on Form 4686.
  5. Filers who take the General Business Credit using Form 3800.
  6. Those opting for the first time homebuyer credit on Form 5405.
  7. Taxpayers claiming the alcohol and cellulosic biofuel fuels credit on Form 6478.
  8. Those filing Form 8834 for the qualified plug-in electric vehicle credit.
  9. Filers taking the alternative motor vehicle credit using Form 8910.
  10. Taxpayers claiming the qualified plug in electric drivemotor vehicle credit on Form 8936.

Therefore, if your tax return included any of the above, you may now electronically file without worrying about further delays. If you already filed a tax return through Rapid Filing Services, and it included 2010 itemized deductions or any other items listed above, you may rest assured that your tax return was E-Filed immediately when the Schedule A form became available for E-Filing. If you still need to file your 2010 tax return, you may now do so confident that all the deductions you want to claim will be available, ensuring that you receive the best tax refund.

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Can My 2010 Tax Return Be Filed Now?

Happy New Year and happy 2010 tax return filing season! A month into the year we’re already seeing an increase in the number of returns being filed and the number of questions we’re getting (here or at dinner parties) is increasing.

So here’s our attempt to answer some of the questions you may have about your 2010 Tax Return. We hope it’ll make things easier for you (and, ok, us): Continue reading “Can My 2010 Tax Return Be Filed Now?”

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2010 Tax Filing: What’s New This Year?

Here are some important changes you should keep in mind prior to filing your taxes this year.

First, the due date to file your Form 1040 is April 18 instead of the customary 15th deadline. This is due to the Emancipation Day holiday observed in Washington DC falling on the 15th this year. The April 18th return date is applicable whether you reside in the District of Columbia or not.

For 2010, there are no longer any limits on the number of personal exemptions and itemized deductions that you can claim. In other words, you will not lose part to your deduction, irrespective of the actual amount of your adjusted gross income.

Please note however that all unemployment compensation you may have received in 2010 generally is now fully taxable. The exclusion from income of up to $2400 that applied in 2009 has been rescinded and is no longer available.

Home Buyers

First time home buyers should be aware that they cannot in general claim the credit for a home if it was purchased after the 30th of April, 2010. However, they may be able to request it if they entered into a written and binding contract prior to May 1st, 2010, with the intent to buy the home before July 1, 2010, and completed its purchase by the 1st of October, 2010.

In addition, homebuyers who bought a first home in 2008 and claimed the first-time homebuyer credit must in principle start repaying it on their 2010 return. Furthermore, any credit claimed for 2008 or 2009 must generally be repaid if the home was sold in 2010 or ceased being their primary residence that same year.

Vehicle Owners

Tax filers who purchased a new motor vehicle in 2010 should note that the itemized deduction or increased standard deduction for state, local, or excise taxes is no longer available. Taxes incurred in the purchase of a motor vehicle are now to be included in the overall sales tax. An exception will be made if the vehicle was bought after February 16th of 2009 and the tax paid in 2010.

Also, the alternative motor vehicle credit for qualified hybrid motor vehicles purchased after 2009 has expired and is not available for 2010 except for cars or light trucks with a gross weight of 8500 pounds or less.

Finally, the 2010 rate for business use of a vehicle is reduced to $0.50 per mile. Usage of the vehicle to receive medical care or in the move from one place of residence to another is now set at 161/2 cents per mile. This change is due to the reduction in gas prices from 2009 to 2010.

Parents & Heads of Households

Individuals who adopted a child in 2010 should know that the maximum adoption credit has been increased to $13,170. Furthermore, this credit is now fully refundable thus allowing to maximize your tax refund.

If you were self employed after March 30, 2010 and incurred health insurance costs, you may be able to include as part of your health insurance deductions any premiums paid for the care of your child who was under 27 years of age even if the child was no longer your dependent. In addition, the deduction is also allowed on schedule SE therefore reducing the overall self employment tax liability.