President Signs Tax Legislation

President Obama has signed into law a sweeping tax bill that gives taxpayers some closure and certainty about their tax situation, at least for the next 2 years. The tax bill benefits a broad range of taxpayers by extending the current tax rates for the next two years, reinstating some expiring tax breaks, and offering longer-term help for the jobless.

Now that the dust has settled, what does this mean for you? Here are some of the changes that you should be aware of:

  • Tax Rates remain the same for 2011 and 2012: The six federal income tax rates will remain at the same levels they are today: 10%, 15%, 25%, 28%, 33% and 35%. In addition, itemized deductions will continue to be allowed in full for high-income taxpayers.
  • AMT extension: More than 20 million taxpayers will be spared from having to pay the Alternative Minimum Tax.
  • Unemployment benefits: Unemployed taxpayers get a 13-month extension of the deadline to file for additional unemployment benefits.
  • Social Security: Workers will get a 2 percentage-point break on their payroll tax for one year. Instead of paying 6.2% on wages up to $106,800, they will only have to pay 4.2% in 2011. This tax break replaces the Making Work Pay credit, which expires at the end of 2010.
  • Child Tax Credit: The bill retains the $1,000 child tax credit and reduces the minimum earnings threshold, which allows more people to claim the refundable credit (meaning you get the credit even if you owe no tax.
  • Relief of ‘marriage penalty’: The bill continues to ensure that the standard deduction for couples is exactly twice that for single filers. It also maintains an expanded 15% tax bracket so that the amount of income in that bracket for joint filers is exactly double that for single filers.
  • Expanded college credit: Paying for college tuition in 2011 and 2012 will be a bit easier with the retention of the American Opportunity tax credit, which allows a credit up to $2500.
  • Additional extensions: The legislation extends a number of tax breaks that have been introduced in the past few years such as the option to deduct on your federal return state and local sales tax instead of state and local income tax. Also, it includes a break for teachers to deduct up to $250 in classroom expenses.

There’s still time – but you’d better move quickly – to save on this year’s taxes. A few simple tips to save you money:

  • Make your home more energy efficient. Slash your tax bill by $1,500 and save money on each utility bill.
  • Donate to charity. Giving back could pay you back in terms of a bigger refund and is a great way to give back to the community.
  • Max out your retirement contributions. Some can save you bucks on your 2010 return and help your retirement nest egg grow tax free.
  • Use your flexible spending account funds. Any money you have in these accounts must be spend or lost. Over the counter drugs will no longer be eligible in 2011, so now is a good time to purchase those medications.
  • Invest in your child or grandchild’s college education by contributing to a 529 college savings plan. In some cases, these can lower your state taxes.

TurboTax is already up-to-date with these tax law changes so you can be confident you’re getting every deduction and credit to which you’re entitled. We understand these changes seem complex, but in reality, TurboTax is designed to identify all the tax breaks for you. It breaks down all these changes, asks you simple questions you can answer easily, and gets you the biggest possible refund.



Comments (86) Leave your comment

  1. I’m confirming that as of 7pm (PST), we have transmitted to the IRS all returns that we were holding while the IRS updated their systems for late tax legislation. Although we had no problems with throughput on our end, the IRS required throttling to accommodate all the returns that had been “stockpiled” during the holding period. I am sure the IRS set many records in the last couple of days processing millions of returns. While the IRS rarely gets credit for anything, this is one where credit is due.

    As for your refund, pls refer to the http://www.irs.gov site for further information. To get an ESTIMATE of the processing cycle, visit http://tinyurl.com/rcc-irs (this is an IRS estimate) and then http://tinyurl.com/wmr-irs (also an IRS site). The IRS updates the Where’s My Refund? information every Wednesday so don’t be alarmed if you see no activity or information for several days.

    Bob Meighan

    VP, TurboTax

  2. Anyone notice that the “Where’s my refund” page on the IRS site says it is refunding twice the amount that I’m supposed to be receiving. Scary; however, I’m going to wait and see if I get a letter.

  3. Thanks Bob, and I know we are all relieved to know that you are listening and working on a solution. Your link on the home page to check e-file status appears to be up to date now and I just got transmission confirmation on a bunch of clients who I filed on Sunday night, that is GREAT news to them and lets me know I was right to stay a loyal customer to TurboTax! Now, let’s hope the IRS can get them all accepted quickly, and peace will reign! Thank you again for all your help.

  4. This is the latest information as of 12:15pm today:

    Q: When will my return be transmitted to the IRS?

    A: As you may know, we have been sending returns to the IRS as quickly as the IRS systems can accept them. All returns held by us will be transmitted to the IRS by the end of the day today. You will receive an acknowledgment from TurboTax, once your return is accepted by the IRS, usually within 24-72 hours after it’s been received.

    Q: When will I get my refund after it is transmitted?

    A: You will receive an acknowledgment from TurboTax once your return is accepted by the IRS. That usually takes 24-72 hours. Once your return is accepted by the IRS, the IRS processes your refund based on the IRS E-file Refund Cycle Chart. You can go to the IRS E-file Refund Cycle Chart to get the PROJECTED date of your refund based on normal processing (http://www.irs.gov/pub/irs-pdf/p2043.pdf).

    To find out when the IRS currently expects to issue your refund, check the IRS “Where’s My Refund” tool. “Where’s my Refund?” is updated weekly, every Wednesday, so check after Wednesday for the most up to date information (http://www.irs.gov/individuals/article/0,,id=96596,00.html).

    Bob Meighan

    VP, TurboTax

  5. Linda in NC… Good suggestion and I wish we could execute on it. Here is the problem. We have no idea how many returns the IRS will process from us each day. We send them as many as we can. So we have no clue how many in any one day. What I can tell you is that it is first in/first out. And your frustration with those who are filing today getting in before others is not true based on our discussions with the IRS. Again, it is first in/first out. People efiling today will be put in line after all the pending submissions that were delayed (while the IRS programmed their computers for the late tax law changes). I will see if we can track our batches by submission date and post that as you suggest. If that is not possible, the best thing to do is continue to check your efiling status.

    Thanks for the feedback.

    Bob Meighan

  6. Mr. Meighan, I have a suggestion. Obviously a million people are going ballistic because their tax return transmissions are being delayed. Your blogs and social media pages are repeating the same response like robots, while evading a basic, simple question. I called your customer service and they said they had no way of telling me when my return would be transmitted to the IRS, although I submitted to you on 2/2. I now understand that they cannot single out my transmission from the queue. However, your website indicates “first in, first out”. Therefore, SOMEONE there is aware of the submission dates for the batches that have been sent to the IRS the past 2 days, or they would not know what was first in/out. We also are aware that the cutoff date with the IRS accepting the transmission is Thursday mornings, for direct deposit on the following week Friday. Now, you could ease a lot of this uproar if you would just post your progress with the dates, so we can figure out in what week’s batch our return will process. A simple updating statement such as “all returns accepted by us through 2/5 were processed as of today”, or, “last night we transmitted all submissions dated through January 31″ would go a LONG way to cut the calls to your support center, and allow your customers to better plan for their anticipated direct deposit. Please, won’t you pass this suggestion to your managers until you find someone who KNOWS the IRS batch transmission progress by date, and then let us know? Otherwise, the first in/first out statement is false because no one there is keeping track……the evasiveness gives your customers a terrible impression that you are holding back something. It’s time for damage control. We would really appreciate an answer before the blogosphere and social media sites get any angrier. We know most of this is the fault of the IRS, however, I would like to know why we were encouraged to file early when the people who are just getting around to filing today are being accepted by the IRS and I am probably a week away from that. What was the point? So please, I respectfully request, could you please find out where we are at on that first in/first out scenario? Have you finished transmitting up to January 31 yet? I believe how you respond to this situation will have a direct impact on how much business you will see next year. I am a long time personal and corporate customer of TurboTax and Intuit and I thought your products were the best, please don’t let me down with the customer service aspect.

    Thank you for your time and attention.

  7. Crystal… Check your status again tomorrow to ensure that the IRS and state accepted the return. If it is accepted, you’re in good share. By the way, we try to be clear about the pricing. Sounds like you also purchased a state (which we disclose on the main TurboTax page) and had the TurboTax fees deducted from your refund. This latter service is provided by a third party bank and the fee is $29.95. You could have used a credit card in which there is no additional fee. I hope this helps. I’m glad this saves you a lot of money over the tax guy.

    Bob Meighan

    VP, TurboTax

  8. I had filled the other day and it said that i had a mistake so i went back and fixed what i messed up and e-filed again, this is my first time using turbotax, but it said 98.45 would be takin out of my taxes for filling and i know now everything is accurate to my forms, will it go through now or should i see an expert, and i thought if you were a first time user it was cheaper as well as the website said 29.99 and thats a little more. I dont mind the price as long as it goes through, thats way less then the “tax expert” i usually use.

  9. Sean… Just a rumor. No one is going to get a better tax result just because they filed later. In fact, you’re in better shape because you already have YOUR money!

    Bob Meighan

    VP, TurboTax

  10. I’ve heard Obama has added another tax stimulus package for people who file after February 17th. Is this true or just a rumor. I ask because i already filed and it seems ridiculous that you would not get the stimulus package just because you filed earlier than that. Or is this just some ridiculous rumor being spread?

  11. I filed both my state and federal taxes on jan 27. Both were accepted by turbotax, but only my state was accepted, not my federal. What is taking so long? Last year i had my refund directly deposited within less than a week.Should I be concerned? I did not have any education/ tuition expenses. Can you tell me if I should be concerned. We had a 1099 that was added this year that we didn’t have year with an extra approx 700$. Could this be the reason?

  12. I filed my return and it said I was eligible for the extra credit of $373, but my question is how do I get this money? Or how is this processed? I recieved my money already, just not the extra… Im confused.

  13. Anonymous… Claiming the American Opportunity credit should not delay the processing of your return (or your girlfriend’s). However, keep in mind that the funding date is only an approximation based on a schedule provided by the IRS. Two days before the estimated funding date, you can go to http://www.irs.gov and click on Where’s My Refund? to get a more accurate date.

    Bob Meighan

    VP, TurboTax

  14. Yes i filed my taxes thru turbo tax but at the rnd when i went to pay it took that but came out and said i could not file efile…Is it because me and my wife file married filing seperate…It says to mail

  15. I read that if you claim tuition/education expenses it can delay your refund process this year. I used your software to process my girlfriend’s return and I used the American Opportunity Credit because she purchased a computer that was needed for online courses. Will that delay her processing with the IRS? If not, should she expect her direct deposit by 02/11/2011? I filed for her and the IRS accepted on 02/03/2011 and your website stated that if a return was filed on that day, a direct deposit could be expected within 8 days.

  16. Do you know how and when the irs will start processing tax form? I file and transmitted my taxes before I knew about the tax laws. what is going to happen now.

  17. bob… We don’t process income tax refunds. You’d have to check with your state to learn when you can expect it. Most states process the refund very quickly, like usually within a week.

    Bob Meighan

    VP, TurboTax

    • Superb post but I was weniordng if you could write a litte more on this subject? I’d be very thankful if you could elaborate a little bit further. Thank you!

      • Hi Rocco,
        Thank you. This was related to tax legislation for tax year 2010 and doesn’t impact tax year 2011. Always check back with us though for the latest changes and tax law updates.
        Thank you,
        Lisa Greene-Lewis

  18. Joann… I’m surprised. I have not heard of a single case of TurboTax doubling anything. Can you provide specifics so I can look into this?

    Thanks,

    Bob Meighan

    VP, TurboTax

    • Hey! Fantastic blog! I happen to be a daily tioivsr to your site (somewhat more like addict ) of this website. Just wanted to say I appreciate your blogs and am looking forward for more to come!

      • Hi Thiago,
        We’re glad you enjoy the blog. Check back for more interesting topics.
        Thank you,
        Lisa Greene-Lewis

  19. Your program is horrible this year, it doubles things and was very problematic, took me two times longer than last year. Sorry Intuit.

  20. Jim… The Feb 11 date is a PROJECTED DATE provided by the IRS. It can and does vary based on their workflow and volume. On the Wednesday before the projected direct deposit date (Feb 9), go to http://www.irs.gov and click on the Where’s My Refund? link to get a more accurate direct deposit date. I hope this helps.

    Bob Meighan

    VP, TurboTax

  21. I received a e-mail saying my federal and state taxes are excepted. the irs time table says feb 11 since i filed on the first for diect deposit and irs says my taxes are processing. do you think i will still get my refund by feb 11th?

  22. China… There is no stimulus check this year. There is a Make Work Pay Credit for which you may qualify. TurboTax will tell you whether you qualify for this or not.

    Bob Meighan

    VP, TurboTax

  23. Do I qualify for the 2011 stimulus check this year?Should I go ahead & file for any other tax form’s?Thank you so much I do get social security as well as disability.

  24. Kimber… TurboTax makes it very easy to claim the first time homebuyer credit. With that much money at stake, you’ll certainly want to file soon.

    Bob Meighan

    VP, TurboTax

  25. I was wondering if Turbo Tax allows for the 1st time home owners tax credit of $8000 if a home was purchased by April 30th 2010? My husband and I are trying to determine if we could use Turbo Tax and still get this credit. Thanks.

  26. Kischi… State laws vary and their “comformity” with federal law and the tax changes varies widely. I can’t comment specifically on what SC does, but I can say that if you follow the TurboTax interview, the software will take care of the federal – state differences.

    Bob Meighan

    VP, TurboTax

  27. Brandon… TurboTax will easily handle your situation. In fact, I’d suggest you try TurboTax Free Edition. Good luck and welcome to the world of paying taxes!

    Bob Meighan

    VP, TurboTax

  28. Justin… You are correct in that TurboTax is up-to-date with the latest tax laws and forms. As with anyone purchasing TurboTax, you’ll need to update TurboTax for the latest tax legislation. TurboTax will prompt you when starting the program to update. Just let it do it’s thing and you’ll then be on the road to a big refund (at least I hope so)!

    Bob Meighan

    VP, TurboTax

  29. Aloha Robert,

    I am wondering, I purchased my copy of turbo tax before some new tax laws were passed regarding educational credits, i’ve read multiple times that turbo tax is up to date and current, but if i already purchased my copy and then the law changed is it really going to be able to help me via the changes in the law?

  30. I’m 17 years old my birthday is in 2 days. i have worked 2 jobs this year. i haven’t live with my mom and i want to file my own tax returns will i be able to do so?

  31. Robert… Many classes may qualify for the education credit/deduction. If you follow the TurboTax interview for education expenses, you’ll find out if you qualify. It’s worth a lot of money, so don’t miss out.

    Bob Meighan

    VP, TurboTax

  32. JT… Sorry to hear about your husband’s injury and all the related medical expenses. If there is any bright side to this, it is that you do not get taxed on workmen’s compensation. That goes right to the bank. As for your medical expenses, you can claim them as itemized deductions. TurboTax will walk you through the process of identifying tax deductions and then tell you if itemizing your deductions is better than the standard deduction.

    Bob Meighan

    VP, TurboTax

  33. Tey… You can use TurboTax without any problem. However, the IRS will likely automatically apply your 2010 refund to tax deficiencies from earlier years.

    Bob Meighan

    VP, TurboTax

  34. I owe $1000 in federal taxes & $800 in state taxes for 2009, will i still be able to use turbotax and if possible set up a payment plan for the money i owe? Or will the irs just deduct the money from my 2010 tax return?

  35. I have used Turbo-Tax for many years. My question is My husband got hurt in February and I have had to pay our health, dental, and eye insurance out of my pocket. I had to also borrow from my 401k to pay for this. I know I have to pay taxes on this from the 401k. Does my husband have to pay taxes on the workers comp he received? Can I claim having to pay for all the insurance? And can turbo tax help me this year with all the changes?

  36. my wife & I are looking at using turbo tax for the first time. does this accept married filing jointly and we both work in seperate states? i also have a child who lives with his mother, but i claim every other year. Is your system set up to handle these complex situations?

  37. Shirley… Only one version of TurboTax (for Windows) can be installed at one time on a computer. If you wish to install another version, uninstall the unwanted version and then install the one you want.

    Bob Meighan

    VP, TurboTax

  38. I have turbo tax home and business for 2010 installed on my computer, but I would like Premeir instead. Will I be allowed to have 2 turbo tax 2010 installed on my computer?

  39. Last year we claimed deductions for a farm for the first time. Can we just stop claiming these deductions, or is there a procedure to follow?

  40. CJ… I’m not sure what you mean by “I’m not in that”. If you are concerned about the possible processing delays at the IRS, still go ahead and start your return. TurboTax will tell you whether any items in your return will result in your return being delayed at the IRS. Even if it is subject to the IRS delay, filing now may allow us to send your state return on to the state so you can get your state refund in just days. About 34 states are working with us to enable us to send tax returns directly to them.

    Bob Meighan

    VP, TurboTax

  41. According to what I read from the December Law I am not in that. Should I still get my return according to the chart.

  42. Robert… CD or download is your choice. However, downloading is convenient and good for the environment. Also, downloading the 2010 will not interfere or compromise any of your 2009 stuff.

    Hope that helps.

    Bob Meighan

  43. Thanks Ashley, you cleared the 2010 version requirement for me. Is there a preference of download or CD? Also I downloaded some 2009 files yesterday. Will the 2010 replace all of those? I assume it will.

  44. Hi Robert,

    No, you need to purchase TurboTax 2010. TurboTax 2009 has tax year 2009 tax laws and forms and is only for tax returns filed for tax year 2009. TurboTax 2010 will be up to date with all current tax law changes and forms.

    Ashley

  45. I have a turbo tax copyright 2009. Can I use this for 2010 taxes? Do I have to upgrade to a version 2010? I use the automated upgrade feature with my 2009. If I buy the Deluxe version on the turbo tax website now am I just getting an updated way to get deductions. Thanks.

  46. I submitted my return on 1/20/11. I’ve discovered I entered the wrong checking acct. #. What do I do? Who do I call?

  47. Tom… I believe you are mixing up prices for TurboTax Online vs. TurboTax CD/Download. They are priced differently because they are packaged differently. Go here for a comparison: http://turbotax.intuit.com/personal-taxes/. (I suspect you are using TurboTax Online.) If you’re comparing the difference in cost between the CD version (Premier vs. H&B), we are $10 different, just like Costco. Looking at the Online price, however, the difference is $25 because you’re also starting from a much lower base price. Does this explain the difference?

    Bob Meighan

    VP, TurboTax

  48. I purchased Turbo Tax Premier and need TurboTax Home and Business. When being prompted by Turbo Tax stating I should upgrade, I can upgrade for $40 – however the purchase price is difference is as low as $10 (Costco), or $25 at the Turbo Tax site. Why is Turbo Tax wanting to charge me more to upgrade than the difference in the product – not exactly a way to keep a customer (especially for an electronic download with no media).

  49. “I received money from both my employer and Tx workman’s comp due to a temp disability. Is this money tax free and/or included in filing?”

    Workmen’s compensation is not considered taxable income if it’s for a job related sickness or injury. Money received from your employer is taxable.

    • Excellent goods from you, man. PSA Public Service Announcment: IRS & You | Money Mend I have understand your stuff eovpirus to and you’re just extremely excellent. I actually like what you’ve acquired here, certainly like what you’re saying and the way in which you say it. You make it entertaining and you still take care of to keep it wise. I can’t wait to read far more from you. This is actually a tremendous PSA Public Service Announcment: IRS & You | Money Mend informations.

  50. I received money from both my employer and Tx workman’s comp due to a temp disability. Is this money tax free and/or included in filing?

  51. i am looking for a turbo tax for mac at retailers… can’t seem to find it… it is for mac’s too isn’t it?

  52. I am needing to know if TurboTax is up-to-date with all the most recent tax codes as of 1/14/11 that were recently signed into legislation. Am I guaranteed that if I use TurboTax today, that I would be receiving all the latest information to be abiding by the most current tax code.

  53. When will i know when my taxes are recieved. I did them on 1/12/2011. I normally hear something by now. I left my e-mail address when i did

    Thanking you in advance.

    Ms. Shutco

  54. I am a doctor working and living in a foreign country. I pay income tax to this treaty country. does the form 1116 keep me from having to pay taxes in the U.S. income tax since the taxes are high in this country ?

  55. Why was my return lower than last year being that i paid in almost $1500 more? I am still in the same tax bracket.

  56. TurboTax gave a user ID and I put in a password. Now I can’t access the account I started. I use the Id and when I enter the password I’m told it isn’t valid. When I ask for help I get nowhere. Do I have to start all over again?

  57. I know this is probaly not for this website but I’ve not received anything from you so far is there a reason for the delay? usually your sending something already to stell me to start ny return. I’ve used your serve for a few years now.

    Thanks in return.

  58. I started an S Corp. last year. Can i file both personal and business return together or do i have to file two seperate returns.

  59. last year when using turbotax I was unable to download updates and was getting error messages Called 3 times to have update cd mailed to me and received none also was unable to e-file as I could not get the updates prior to attempting to e-file IF I use turbotax for 2010 will I be able to get the updates this time and e-file was not happy having to mail in the tax forms kindly respond to this note as you did not to my past e-mails and phone calls

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