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Local News

January 9, 2013

'Cliff' could delay area tax returns

(Continued)

“This could create problems for those counting on an early refund,” Dickson said. “It’s going to be about three weeks later than they normally get them.”

He said while the IRS is delaying the date when the agency will begin processing returns, there has been no indication that it will extend the tax filing deadline. In New York, the deadline for filing income tax returns this year is April 15.

McLain said the IRS must design the new tax forms so the tax-preparation software industry can craft programs consistent with them. For the IRS to be able to configure the new forms, it relies on getting accurate information from Congress, and that is what has caused the delay, he said.

“Congress has been dragging its feet and leaving everyone in the dark,” said McLain, noting local Rep. Chris Gibson, R-Kinderhook, vowed to look into the situation when the two met in Oneonta on Monday.

McLain said he is still waiting for the IRS to release details about how the fiscal cliff agreement will affect taxpayers who have been subject to the alternative minimum tax.

That tax has been paid by some 28 million middle-income Americans. News accounts have suggested there fiscal cliff deal will provide some relief for those who were subject to the alternative minimum tax, as a “patch” applied to it will result in its qualifying incomes being indexed for inflation.

McLain said he hopes the federal government will quickly resolve the outstanding questions on how the fiscal cliff agreement will impact the tax structure.

“I think it’s going to be a little bit panicky early on, but then I think it will level out,” he said. “We will know about the changes when we see them in black and white.”

The agreement in Washington is expected to result in workers seeing a bite in their paychecks as the result of the expiratyion of the Social Security payroll tax cut. The Social Security tax cut had left that rate at 4.2 percent, but it increases to 6.2 percent this year. Experts said that will result in a person earning $50,000 a year seeing about $80 a month less in his or her paycheck.

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