Filing taxes? What you need to know.
Congress's last-minute 'fiscal cliff' deal extended many popular credits and deductions and permanently patched the Alternative Minimum Tax -- all good news if you're filing 2012 taxes.
Pablo Martinez Monsivais / AP
Taxpayers preparing to file their 2012 returns can breathe a collective sigh of relief.
The alternative minimum tax or AMT has been patched — permanently — and several tax credits and deductions that technically expired at the end of 2011 were extended as part of the fiscal cliff legislation that Congress passed and President Barack Obama signed into law in January.
"It certainly puts back into place many of the tax benefits that had expired for many people," said Mark Steber, chief tax officer with Jackson Hewitt Tax Services. "The extenders will be back on people's tax returns, making their 2012 refunds larger than they would have been."
But the delay in congressional action could mean confusion for some taxpayers over what credits and deductions still exist.
That could make going it alone on tax day costly. Experts say people should seek some guidance, whether it's from a professional tax preparer, up-to-date software programs or tax guides, before filing returns.
More than 90 percent of taxpayers go to a tax preparer or use tax software to file their returns, estimated Jim Buttonow, a 20-year IRS veteran who is now vice president of products for New River Innovation, a tax technology company.
The Internal Revenue Service will begin accepting returns Jan. 30, an eight-day delay necessitated by the late congressional action.
"We have worked hard to open tax season as soon as possible," IRS Acting Commissioner Steven T. Miller said in a statement. "This date ensures we have the time we need to update and test our processing systems."
The agency said most taxpayers — more than 120 million households — would be able to begin filing Jan. 30. But filing for those claiming energy credits, depreciation of property or general business credits will be delayed until late February or March.
Last year, the agency received 137 million returns.
Electronic filing increased by 6.2 percent to 113 million in 2012, an upward trend that tax experts expect to continue. Although most electronically filed returns are by tax professionals, increasing percentages of individuals are doing their own returns electronically.
Page 1 of 4