Usually the IRS starts to accept tax returns on January 22nd. This gives people three weeks into the new year to gather their paperwork, file their taxes, and then receive their tax returns sometime in the first week of February. However, this year we had a fiscal cliff debacle that was not resolved until after January first. This meant that new tax laws were in effect for less than a day, and it has set the IRS back in their preparation. In order to make sure they are fully prepared for this year’s tax season, the IRS will not be accepting returns until January 30th.
Most people have to wait at least a month into the new year before they receive all of their W2’s and charitable giving statements. This means they will have to wait well into February before they can file their taxes. Of course many of them do not even file at that time; they push it back even further and file at the last minute. But for those who are self-employed, or have a simple return, or work for a company that gets the W2’s out quickly, they might have been ready to file on the 22nd. This year, they will have to wait an extra week, and their refund will be delayed an extra week.
There are thousands, if not millions, of people that count on their tax refund as a part of their income. Some need it to survive, others need it to pay down debt, some will invest it, and others will use it to pay for a vacation. For those who need their refund early, this year their finances will be thrown off.
Considering the number of returns the IRS must process, they are actually very efficient. But when the fiscal cliff debate extended as long as it did, it caused some new tax laws to go into effect, if only for a day. This required the IRS to recode their computers in order to change them to reflect how the laws were settled on. The new laws, and new filling dates, do not mean that people cannot compile their tax documents and have everything ready to go. It just means the IRS will not be ready to accept the returns, and subsequently will not issue refunds, until later (about mid-February refunds will start going out).
If you were counting on your tax refund sooner this year, you may just have to tighten your belt. The IRS delays accepting returns will have the biggest impact on people juggling holiday bills with other debts. The refunds will still come in a timely manner, and most people will not even have to worry because most people do not file before February. But those who want to file soon, and have non-typical deductions, such as a residential energy tax credit, they might see a bit of a delay in their refund. For those wondering, since the IRS is taking an extra week to start accepting, do we get an extra week to file? The answer is, no. You still need to have those returns post-marked by midnight April 15th.