There are two things the Internal Revenue Service wants you know about the American Taxpayer Relief Act – aka the “fiscal cliff deal” – before filing this year’s return: Don’t believe anyone who wants to charge you a fee for early filing and don’t use your final 2012 pay stub rather than a W-2 as proof of income.
The ATRA, which locked in the past decade’s rates for most income levels but includes some changes, caused the IRS to push back the date it will begin accepting electronic returns from Jan. 22 to Jan. 30.
“We had to push back the date to allow us time to update forms and be ready to process returns,” said Mark Green, an IRS regional spokesman for South Carolina.
The agency says more than 80 percent of taxpayers file electronically. It does store paper returns received prior to Jan. 30, but those won’t be processed before that date. The IRS “Strongly advises you to e-file,” Green said.
“It’s faster, it’s safe and secure and you get your refund faster.”
Most important, however, is using the W-2 as documentation.
“Starting back in December, some people, some businesses were starting to solicit people to prepare their returns now and use your pay stub from your last paycheck [of 2012] and it’s not good,” Green said.
“We can’t tell people what to do, but we strongly discourage anyone from using the pay stub from their last paycheck instead of waiting for your W-2, which are being prepared as we speak.”
Green says anyone who doesn’t wait for their W-2 because they believe they will get their refund sooner using the pay stub is setting themselves up for disappointment.
“It won’t get you a refund early because we are not accepting returns until Jan. 30,” he said.
“Also, this could cause problems,” Green said. “You’ll want to look at the W-2 and the pay stub and match it up to make sure it’s accurate. If you final a return that’s not accurate, that could mean penalties and fees or not getting the correct refund.”
For tax preparers, the ATRA means having to hurry up and wait.
“I think the word is getting out fairly well because we’ve been pretty quiet,” said Bill Deaton, owner of B&D Business Services in Rock Hill, who does tax preparation for individuals and businesses.
“The effect is, it’s backing things up quite a bit. We’re telling people to go ahead and bring your stuff in if you want, but we e-file and we can’t push that button before Jan. 30,” he said.
Deaton said most – but not all – of the changes that come with the ATRA will be felt in 2013.
“One of the caveats that I understand from talking to the IRS if you need to fill out a Form 4562, which is depreciation. If you have that on your tax return either as an individual or a corporation, that form will be held up until the end of February. That just came out a couple of days ago from the IRS,” he said.
Something else to be aware of, Deaton said, is that although the filing date has been pushed back, the deadline remains the same.
“An IRS representative I spoke to said they are not going to extend the tax season beyond the April 15 deadline no matter what,” Deaton said.