Even if a deal is reached on the fiscal cliff before the deadline, Cumberland County CPA Keith Huntzinger says tax season is likely to be delayed, meaning a longer wait to get your refund.
“It will affect all taxpayers. Certainly, the backlog that IRS will have initially will have a ripple effect throughout tax season,” said Holzinger.
If there is no deal, taxpayers will soon see the expiration of the Bush-era tax cuts and an end to the 2-percent payroll tax holiday under President Obama. There will also be over $1 trillion in cuts to government programs, spread out over the next ten years.
Beyond that, CNN Money reports up to 100 million taxpayers won’t be able to file their returns until late March if Congress fails to approve a patch for the alternative minimum tax. The tax itself directly affects about 30 million taxpayers, while the others would be affected by the backlog.
Huntzinger points out tax season was delayed until February a couple years ago due to a late-year tax deal among Washington lawmakers.
“Based upon that, I would expect that there will be probably a delay until at least that time frame again this year,” said Huntzinger.
Huntzinger said he’s received calls from concerned clients since late summer. He’s encouraging people to set some money aside in case they face higher tax bills in 2013. He’s also counseling clients to pay attention to whatever deal is reached on the estate tax and popular deductions such as charitable giving and the mortgage tax deduction.