With the April 15 tax deadline less than three months away, here are answers to a few reader questions.
The Internal Revenue Service will begin accepting and processing federal tax returns on Feb. 12. But if you’re ready before then, file electronically, says Eric Smith, an IRS spokesman. “Our e-file and Free File partners will hold any returns they receive and then transmit them to us on Feb. 12,” he says. The average refund on federal income-tax returns last year was about $2,500.
What are the chances that Congress will repeal or modify the $10,000 limit on state and local tax deductions and make changes retroactive to last year?
It’s too soon to know whether Congress will approve any changes for this year or future years, but don’t expect any relief to apply to last year.
Repealing or altering this limitation is “a high priority for a number of Democrats,” says Hank Gutman, a former chief of staff of Congress’s Joint Committee on Taxation and now of counsel to the law firm Ivins, Phillips & Barker. Even so, the outlook remains blurry. But if lawmakers do take action, he says, “I can’t imagine [any changes] would be retroactive” to last year.