In addition to waiting longer for refunds, many taxpayers also are seeing smaller paychecks this year because Congress didn’t extend a two-percentage-point cut in the payroll tax that expired at the end of 2012.
The IRS had said last month that it might delay tax-filing season for as many as 100 million households, or two-thirds of the total, if Congress didn’t reach an end-of-year budget agreement.
The legislation signed by President Barack Obama on Jan. 2 averted most of the $600 billion in tax increases and spending cuts -- known as the fiscal cliff -- scheduled to take effect this month if Congress didn’t act.
The law also affected tax provisions that were pending for 2012 returns. It permanently indexed the alternative minimum tax to inflation, preventing it from expanding to more households, and extended tax credits that expired at the end of 2011, such as those for energy improvements and businesses.
Tax Preparers
H&R Block is still trying to determine which forms the IRS will need additional time to update and as a result, which taxpayers may see filing delays into February or March, Pickering said in an interview yesterday.
Companies including H&R Block and Intuit Inc.’s TurboTax said they have readied tax-preparation products for the recent tax-law changes and software will update automatically or prompt users to make changes when they log on.
Taxpayers can prepare their returns now online or in stores, and the firms will hold them until the IRS opens filing season on Jan. 30, according to H&R Block and TurboTax.
“TurboTax is up to date with all recent tax-law changes so taxpayers can file early and be first in line to get their refund,” Ashley McMahon, a spokeswoman for TurboTax, said in an e-mail. “Once the IRS begins accepting e-filed returns on Jan. 30, TurboTax submits returns on a first-in, first-out basis.”