Businesses Feel The Pinch From Late Returns

tax statementCongress spent the better part of 2010 debating how to extend tax credits and deductions that expired at the end of 2009. Members finally struck a deal late in December.

But the long delay is having knock on effects. The IRS took until February to reprogram its computer system to accept the renewed tax breaks.

"For many sole proprietors who were expecting to file early, they weren’t able to file, they weren’t able to get their refunds. It had a major impact."

Peter Blank, editor of The Kiplinger Tax Letter, says small businesses aren’t the only ones feeling the pinch.

"Many of the corporate and partnership forms weren’t available until mid-to-late February. So, it’s just condensed the filing season for them and made things tougher."

The delays hit individuals as well. IRS computers refused to accept itemized returns until February 14. Among the holdups, the need to reprogram IRS computers to allow Texas residents to deduct state sales taxes.
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