We narrowly avoided going over the fiscal cliff earlier this month, but Congress’ down-to-the-wire decision making has had an unsavory side effect.
Tuesday the IRS announced that tax return filing season won’t start until the end of January. That delay is expected to impact the 18 million people who would normally file their taxes this month.
If you’re waiting for that refund check to pay off holiday purchases or to finance a vacation, you’re going to have to wait until Jan. 30, 8 days after the initial start date of Jan. 22.
You can blame Congress. “When congress waits until the second of January and taxes normally kick off on the 10th or 12 of January, the IRS just doesn’t have enough time,” says Andy Stadler of Stadler and Co. Tax Service.
The people this delay will affect the most are the ones who rely on it the most. “This is a younger family. They just got W2s, maybe a couple of kids. Their tax return is real simple, but they need their refund pretty quick because they’re a younger family–maybe they need it to pay their rent, buy food, pay off their Christmas credit card bill,” says Stadler.
The tax refund filing delay will also delay when you get your refund. Stadler says not to expect refunds until the end of February.
“That affects my family because my family is depending on the same tax check to come, so that affects my family in a way to where ‘man, we’re losing out on extra money. What’s going on?'” says Dustin Pruitt, a student at Ivy Tech Community College.
Stadler says many people build their financial life around their refund–using them to pay off debt or to make a big purchase. The companies that depend on those purchases will also feel the impact. “It’s really affected us as far as layaway, special orders, people pre-planning for the spring. They’ve already come in and made comments about the special orders coming in, so it’s affecting us,” says Kim Worland, owner of Furniture Gallery. Worland says the delay has likely set them back about 30 days.
Stadler says the last week of January and the first week of February are typically the busiest of tax season, so even though the tax return filing season is delayed, you shouldn’t delay your preparation.
“If you try to wait until the end of January it’s going to be overwhelming. And it doesn’t matter if you come to my office or any other accounting offices. It’s just going to be a very very large crowd. So if you’ve got your documents, go ahead and come in now and get your tax return done; just can’t send it to the IRS until then [Jan. 30],” he says.
Some taxpayers who need to use particular forms will have to wait even longer. For example, people who want to take advantage of residential energy credits or general business credits can’t file until February or March.
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Tags: Income Tax, IRS
