By Budd McLaughlin
The government shutdown in October is causing the Internal Revenue Service to delay accepting and processing 2013 tax returns next month.
According to spokesman Dan Boone, the IRS will begin accepting and processing the 2013 tax returns at a later-than-normal Jan. 31.
“The delay is to allow time to update, program and properly test all systems after that process was interrupted by the partial government shutdown,” Boone said.
It’s expected that some 2.2 million returns will be filed by Alabamians, with nearly 1.9 million of them filed electronically.
Boone said taxpayers should take advantage of IRS Free File, at IRS.gov, where all filers can prepare and file their returns free online beginning Jan. 31.
“E-filing speeds up refunds and eliminates most errors, plus you get confirmation that the IRS got your tax return,” he said.
While there is a delay to processing returns, the clock is ticking when it comes to charitable deductions that must be made by Dec. 31 to count for the 2013 tax year.
“Taxpayers need to act now when it comes to making donations to charities and contributions to workplace retirement plans,” Boone said.
He provided these reminders, which have a Dec. 31 deadline:
Gifts to charities: Donations to qualified charities must be made by Dec. 31 to be deducted on 2013 tax returns.
Deductions must be itemized and there must be proper documentation for each donation, no matter how large or small it is, to take the charitable contributions deduction.
A donation charged to a credit card by Dec. 31 is deductible for 2013 even if the credit card bill isn’t paid until 2014.
Tax-free IRA distribution: Filers who are age 70 1/2 or older can have up to $100,000 transferred directly to a qualified charity. This transfer can serve as the filer's required minimum yearly IRA distribution, is tax-free to the filer, and benefits the charity. But this tax benefit is set to expire after Dec. 31.
Saver's credit: Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2013. The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs.
People have until April 15, 2014, to set up and contribute to a new IRA for 2013 or to add money to an existing IRA for 2013, but elective contributions to a 401(k) plan or similar workplace program must be made by Dec. 31.