Tax season is here, but due to Congress’ late response to dealing with the fiscal cliff, deadlines have changed.
Due to changes to the American Taxpayer Relief Act (ATRA), the Internal Revenue Service (IRS) has not yet opened the season to file. The IRS announced last week that individual income-tax returns could start being filed on Jan. 30.
The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2.
The IRS is anticipating that more than 120 million households will file around the Jan. 30 opening.
However, as the IRS continues to sort out what actions taken by Congress mean to the American people, others will have to wait even longer to file taxes this year.
The IRS estimates that remaining households will be able to start filing in late February or into 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. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.
“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”
The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.
“The best option for taxpayers is to file electronically,” Miller said.
The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.
Who Can File Starting Jan. 30?
The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming: the state and local sales tax deduction; the higher education tuition and fees deduction; and the educator expenses deduction.
Who Can’t File Until Later?
There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March. A specific date will be announced in the near future.
Updated information will be posted on IRS.gov.