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Subscribe to RSSWith some investments already feeling the pain of the looming cliff, millions of Americans are at risk of being affected. The first to consider is the expiration of the Bush-era tax cuts, according to CNBC's Jackie Deangelis.
If you’re the type of person who likes to file your income tax return as soon as possible, then you’ve got another reason to be frustrated by the fiscal cliff stalemate in Washington, D.C.
Most of the tax changes being discussed as part of the fiscal cliff negotiations would go into effect in 2013, meaning that taxpayers would first have to account for them when they went to file those tax returns in early 2014.
But a handful of the provisions under discussion could affect Americans’ 2012 taxes. The down-to-the-wire negotiations in the nation's capital could leave the IRS scrambling to adopt the changes in its systems, delaying the agency’s ability to accept some people’s returns.
“Congress oftentimes waits until the last minute to pass legislation, and then that in a turn affects the IRS,” said Bob Meighan, vice president with tax software provider TurboTax.
That's definitely been the case this time around. Just a few days before the end of the year, Congress has not been able to come to an agreement over a series of tax increases that are scheduled to go into effect Jan. 1. President Barack Obama said Friday that he was "modestly optimistic" a deal could still be reached to avert going over the so-called fiscal cliff.
Acting IRS Commissioner Steven T. Miller has already warned that there could be serious filing delays if Congress doesn’t provide a patch for the Alternative Minimum Tax. An IRS spokesman said Friday that the agency did not have any further information beyond the warnings Miller gave to lawmakers in a letter earlier this month.
The AMT is a provision in the tax code that was designed to ensure that wealthy taxpayers have to pay at least a minimum amount of taxes. It was never indexed for inflation, however, so Congress has had to provide temporary fixes over the years to ensure that lower-income taxpayers aren’t affected.
That hasn’t happened yet this year because of the fiscal cliff stalemate. In the letter to House Ways and Means Committee Chairman Dave Camp earlier this month, Miller, the acting IRS commissioner, warned that if Congress doesn’t provide a patch this year, then the IRS would have to make significant programming changes to account for that.
“In that event, given the magnitude and complexity of the changes needed, I want to reiterate that most taxpayers may not be able to file their 2012 tax returns until late in March of 2013, or even later,” Miller wrote in the Dec. 19 letter.
Miller also warned that as many as 30 million additional taxpayers could be subject to the AMT if a patch isn’t put in place.
For now, Miller said the IRS is acting as if Congress will provide an AMT patch.
Meighan, of TurboTax, said his company also has prepared its software as if a patch will be in place. But he said the company also is ready to switch gears quickly if it must.
Meighan said a few other provisions under discussion as part of the fiscal cliff negotiation could affect a minority of taxpayers in 2012. Those include a deduction teachers get for school supplies they purchase for their classrooms and a tuition and fees deduction that applies to some students.
"It's really gotten to a point now where you have the ideological divisions in the country overlapped now with the partisan divisions," said CNBC's Chief Washington Correspondent John Harwood.
The IRS has had to ask people to delay filing their returns before. In 2010, Congress passed last-minute tax law changes on Dec. 17. As a result, the IRS said it wouldn’t be able to accept returns with itemized deductions until February of 2011 because it needed time to adjust its systems.
If people are forced to wait to file their tax returns, that would also mean a delay in getting tax refunds. Roberton Williams, a senior fellow with the Tax Policy Center, said that in turn could have some effect on the economy because many people count on that money to pay off debt or buy big-ticket items.
If the AMT isn’t patched at all, he noted, that would be an even bigger economic hit because some taxpayers wouldn’t get their expected refund at all.
“That will have a major effect on the economy,” Williams said. “It will be pulling a lot of money out of the economy that people are expecting.”
Despite the Congressional deadlock, experts say they are still assuming a deal will be made to put the patch in place.
“For most people, come 2013 they’ll be able to file their taxes, they’ll get their refund and life goes on,” Meighan said.
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The people voted in President Obama. So the Republican should start working with the Democrats.If the Republicans cant't start working with the Democrats again. The people from each Republican state should do a recall on thier congressman and Senators.
Amen to that Anthony!
The problems aren't with the tea party. They only want something that is unattainable in this political climate. Fiscal responsibility, something that our political leadership has been unable to accomplish since Gingrich forced Clinton to accept a balanced budget. It was done then, it can be done now.
From [usatoday dotcom/story/news/politics/2012/12/30/fiscal-cliff-deal-politics/1798679]
Lawmakers have until the new Congress convenes to pass any compromise, and even the calendar mattered. Democrats said they had been told House Republicans might reject a deal until after Jan. 1, to avoid a vote to raise taxes before they had technically gone up, and then vote to cut taxes after they had risen.
We will be over the cliff and I almost feel like yelling "JUMP"
Did those non-caring fools work on Saturday on the problem? Probably not! The pissants who say they are pols interested don't care about you and me - they are only worried about themselves and how they can get the most out of their position.
There is no difference between one side of the aisle and the other - they all suck.
How about if we the people vote on having our law makers salaries cut in half on both sides?
don't forget their pensions and benefits.
depraw
There ya go :)
debt ceiling...
if you took out a mortgage....................you raised your debt ceiling
if you financed a car.............................you raised your debt ceiling
if you took your family out to dinner and paid with a credit card..........you raised your debt ceiling.
Anyone who needs a tax refund to pay bills is demonstrating poor financial planning. Proper planning would have generated withholdings roughly equal to the tax liability. It is better to owe Uncle Sam a little in April than to have loaned him a lot for an entire year.
Well it's just good to know the republicans or the top 2 % never cash in on government programs or have a slue of lawyers and tax consultants to rip the government off with tax shelters or loopholes for every penny they can get before they caught
only the poor does that right. why the need for food stamps ..there's plenty of food to go around just look at all the soup kitchens they got out there
Well here we go again! Something is terribly wrong in Washington. Selfish beauracrats, with nothing better to do then to "screw" their constituents. They all talk a good talk when election time rolls around...... So we put them in office perhaps it is time for change in Washington. Why does the "little" man have to suffer. Oh what happens to those people who never pay taxes in the first place. I guess this "cliff" won't affect them anyway..... Seems almost like deja vu. They raised the Medicare premium for part B, but then they are not going to pay doctors as much as they were. So up the premium and cut the benfits. What is that all about.
It is complete crap to say the fiscal cliff will effect filing tax returns for 2012, implementing new or keeping old rates in effect is not a monumental problem or workload for the IRS, payroll processing companies, and others, if you are not able to load a new table of tax rates and other minor changes if the rates change in time for the next pay period you ought to be fired, stop the complaining, plain for change or no change, and go on with business
@Stan - the fiscal cliff WILL impact 2012 tax returns but it has nothing to do with tax tables or rates. It's the AMT - alternative minimum tax. IRS has programmed it's computers assuming the AMT will be "patched" to account for inflation as it has been for many years... AMT was originally meant for the wealthy - without a patch, the AMT will impact couples earning as little $49,500 and will increase the 2012 tax of those impacted by an average of several thousand dollars...The 2012 filing season begins soon - without a patch, the IRS has no choice but to re-program and test for several months. That is another impact on the 2012 filing season as those impacted will not be able to file for several months. Without a patch, the AMT is expected to hit millions of taxpayers...
It seems as though most of us complain about the gop and democrats but someone had to vote them into office..They are a sorry lot,no doubt about that..It's all about "what can we do for us and not what can we do for the country"'Maybe some day the voters will learn.Most politians are bs'ers.
If you have a refund coming, suck it up, you probably won't get it anyway and if you owe the goverment, let them suck it up, they will misuse it anyway.
I totally agree with REAL DEAL......It's time for a REVOLUTION! There is so much corruption in the White House that there isn't any way we can really trust anything they say or do. Does anyone here agree with Our government changing Our Constitution? The same one Our ForeFathers fought for. It has worked for Us so far, it's not broken so why mess with it? I am not the smartest person in this Country but I have paid my share of taxes therefor earned the right to say let's Clean House and stop this fighting and fix whats wrong in Your House before You try to mess with mine!!
It isn't about the taxes or the spending or the deficit or the debt. This fight is all about absolutism on both sides. We have 537 elected members of the National Government who are behaving like five-year olds in a sandbox. If you doubt my math, add 435 representatives to 100 senators and two elected members of the executive. Every one of these 'distinguished solons' can find a TV camera and a microphone but not one of them can find any sense of duty.
Ladies and gentlemen, you were not elected to preside over the collapse of the government of the US. You were elected to act responsibly to "preserve, protect and defend" the Constitution of the US and the government it establishes. If your constituents are going to vote you out at the next primary because you "violated" some sacred principle then perhaps they deserve to have you help drive us over the cliff.
We, the People of the United States, put you in office to do a job. We, the People are the ones to whom you swore that oath on the day you took office. We, the People, recognize who are the oathbreakers and may God have mercy on you at the next election. If you fools cannot get this done, I assure you that we, the people, will not be merciful at the next election.
It is time to turn each and every one of the rascals out.
Well posted!
If Washington doesn't do their job why should we? Lets not file our taxes at all. Imagine if tax day came and went and 50% of the population didn't file taxes. What are they going to do come after all of us?
This WILL impact 2012 taxes!! If the alternative minimum tax (AMT) is not "patched" now, the impact will be retroactive to the beginning of 2012! Also, if it is not "patched" for inflation, couples filing joint and earning as little as $49,500 per year will feel the hit! IRS is currently programmed as though the AMT has been patched - if we go over the cliff, IRS will have to re-program and test - that is what will delay filing your taxes until mid or late March.
For those of you that are fine with the supposed rich paying more taxes, if the AMT is not fixed, the "rich" couples making as little as $49,500 will find that they can't file for several months and most will have their refunds decreased by several thousand dollars or might even owe!
Even if they fix this 30 days down the road, IRS will have been re-programmed as though it hasn't been "patched" and filing will be delayed that much longer... All of this is an outrage but so many of you don't realize how the AMT might hurt you this filing season - for tax year 2012!
Obviously all of our elected officials need help in doing their elected jobs.
I propose that we all as concerned citizens stop immediately in purchasing any large ticket items including: Cars, homes, electronics, furniture, clothing, restaurants, travel until Congress and the President get this done. If we all collectively only purchase food and what is needed in our lives for the next few days, they will get the message fast.
well all I can say for OBAMACARE is that I'm for it, why is that Europe have a health care system that is paid for by the tax payers and yet in the USA our insurance rates go up and healthcare cost are rediculous...please tell me how can a woman in Great Brittan have a baby in the hospital and not pay one red cent, the last time I had a baby hospital cost were around $15-$16K and that did not include the any of the Dr's fees that was strickly the hospital bill, I would love to be able to go the Dr and not worry about the co-pay and what was and wasn't covered...also did u know in Europe after the mother gets home with the baby her and her husband can take up to a year to be home with the newborm 6 paid and 6unpaid months, WOW!!! and we (in the US get all of 6 weeks) unless we are wealthy and can afford to be home longer than that with the baby....Im hoping we get OBAMACARE...its a step in the right DIRECTION...
tweety...run a business like that and see how long you keep the doors opn
Actually, I think what would really help is if this nation wasn't known to support lazy people on welfare. Yeah let's give foreigners who are here illegally and lazy people TANF to sit on their butts all day while the rest of us work. If we stopped funding this, this would actually help alot, but you know what it wont happen and why? because people want to exploit our once great country, just wait soon all of our rights will be gone. And for all you who voted for Obama, you made your beds now lye in them. Its not just congress fault, the president is not helping either. Call me a racist or whatever you want ( when you say anything bad about obama apparently your a racist) this is just my opinion.