Fiscal cliff debate delays some 2012 tax refunds
The IRS will begin processing tax returns on Jan. 30 this year, 8 days later than usual.
You might get your tax refund later than usual this year, and you can thank the congressional debate over the fiscal cliff for that.
The IRS says that it will begin processing individual tax returns on Jan. 30 this year, eight days later than usual. The reason: Programming IRS computers and printing forms and instructions were delayed by congressional wrangling over the fiscal cliff — a combination of tax hikes and spending cuts that briefly became law on Jan. 1.
About 120 million individual taxpayers will be able to file Jan. 30, the IRS says, and most people will get their refunds on time. “We have worked hard to open tax season as soon as possible,” IRS acting Commissioner Steven T. Miller said in a news release. “This date ensures we have the time we need to update and test our processing systems.”
CHANGES: Tax preparers say they’re prepared for changes
IMPACT: Deal means taxes will rise for most Americans
The issue was not higher tax rates for wealthy individuals, because those go into effect for the 2013 tax year. But tax rules that Congress had to extend for 2012 stalled the IRS, because it has to program its computers for those changes. Congress didn’t reach an agreement until Jan. 1.
“There was not a lot of acrimony on large pieces of the tax packages,” says Gary Schatsky, a New York financial planner. “If Congress could have come to grips with them early, people would not have had uncertainty about what large portions of the tax code looks like, nor would people have had to put off filing as soon as they desire.”
Those with the most common “extenders” — the Alternative Minimum Tax patch, and deductions for higher education, state and local sales tax, and out-of-pocket expenses for educators — will be able to file by Jan. 30. TurboTax says it’s accepting e-file returns and holding them until the Jan. 30 filing date.
But some people won’t be able to start filing until late February or March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits, the IRS says.
Because filing season starts eight days later, will the April 15 filing deadline be pushed back eight days? Not a chance. You’ll still have to have your return postmarked by April 15 to avoid late-filing penalties.