President Signs Tax Legislation

Tax News

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

    1. 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!

      1. 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

    1. 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!

      1. 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

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