Source: Some shouldn't file taxes until Feb.

December 21, 2010 3:10:22 PM PST
Normally, the advice is to file your taxes as early as possible.

However, a source close to the IRS tells Action News that the agency will encourage taxpayers who itemize to delay filing until the end of February.

This new information is critical for all taxpayers, especially if you're counting on putting your return toward bills or scheduled projects in early 2011.

This is because the IRS couldn't program its computers or change its forms to accommodate last-minute tax changes until Congress finally voted on whether or not to extend certain tax credits.

Meantime, here are some year-end tax tips: Focus on your flexible spending accounts, the pre-tax money you've set aside to pay for things your health plan doesn't cover. Some companies require you use those dollars by December 31st.

"Under FSA rules, if you don't use it, you lose it. So you've basically given away money for no reason whatsoever," said Joseph Murray of First Financial Group.

The new federal health care bill stipulates that after December 31st, you can no longer use your FSA funds for over-the-counter, non-prescription drugs.

If you itemize your taxes on your return, you can deduct your donations but only if it went to an I-R-S recognized 501c(3) organization. You can confirm the status of a non-profit by going here to the IRS website.


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