Tax Filing Season will Start January 30, 2013
Last year was a significant one for many individuals who made key changes to their finances and investments in anticipation of the fiscal cliff. However, those who want to see how these changes will impact their tax liability may have to wait longer than usual due to the Internal Revenue Service's recent announcement that it will delay the start to tax filing season to January 30, 2013.
The IRS made the announcement on the heels of the fiscal cliff deal reached by lawmakers, which resulted in several key changes to tax law and made certain benefits and rates permanent. In response, the federal agency said it must delay the start of filing season to take the new laws into account. Meanwhile, it will begin updating forms and completing programming and testing of its processing systems. The delay is likely to affect roughly 120 million Americans of all income demographics who file income tax returns.
However, the IRS said the delay may have more of an impact on those who file more complex returns and claim certain tax benefits. For example, those claiming residential energy credits, depreciation of property or general business credits may experience a longer wait time after submitting their returns as the IRS may require more time to process extensive forms and update systems.
"We have worked hard to open tax season as soon as possible," said IRS acting commissioner Steven Miller. "This date ensures we have the time we need to update and test our processing systems."
However, individuals should keep in mind that the filing deadline is still April 15. Although taxpayers may have to wait longer to file, they may benefit from using the additional time to take into account the tax law changes made on January 2. For example, the estate tax law was made permanent and sets the lifetime exemption at $5 million for individuals - or $10 million for joint filers - and a tax rate of 40 percent. As these terms will not experience fluctuations in the future, the new year may be a good time for individuals to begin making concrete decisions regarding their estate planning.