WASHINGTON - The Internal Revenue Service will start processing several belatedly enacted tax breaks, including a deduction for higher-education tuition, on Feb. 3, the tax agency said Monday.
Sound off on the important issues at
The sales tax provision allows taxpayers to deduct state and local general sales taxes instead of state and local income taxes. The option is available to all taxpayers, but is primarily of interest to residents Alaska and eight other states that do not have income taxes: Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
The starting date for processing returns will also affect taxpayers claiming state and local general sales tax deductions and teachers claiming out-of-pocket personal spending for their classrooms.
These tax breaks, which expired on Jan. 1, 2006, were renewed as part of a tax package that Congress passed in December, after the IRS had gone to print with the forms people will use in filing returns for 2006.
The IRS, in a statement, reminded taxpayers that both paper and electronic returns will not be processed immediately if submitted before Feb. 3. It said that paper returns will be accepted but will not be processed until after IRS processing systems are updated on that date.
The tax agency has estimated that the delay in processing returns claiming these deductions will affect less than 1 million out of the 136 million individual tax returns it will process this year.
Taxpayers can go to http://www.irs.gov/ to obtain more information on how to claim these deductions.
The higher-education deduction allows taxpayers to deduct up to $4,000 of tuition and fees, while the educator expense adjustment provides deductions of up to $250.
© 2018. All Rights Reserved. | Contact Us