2012 Tax Filing Season Delayed Because of Last Minute Legislation
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At the start of this year, I felt really good about tax season. We are staffed with smart hard working people who have the time to turn out high quality work without lots of stress. Our policies and procedures are in place and our clients know what is expected of them so we can produce timely, high quality tax returns. But then, the tax laws were changed at the last minute passing of the American Taxpayer Relief Act of 2012 plunging tax season into chaos.
Delay, Delay, Delay
While we escaped the plunge off the fiscal cliff, the last minute legislation of the American Taxpayer Relief Act of 2012 requires the IRS change some very critical forms. The IRS has to change its computer software and change approximately 30 forms to implement the last minute legislation. With the hiring freeze that has been put in place at the IRS, their resources are stretched thin. These changes to the forms and computer systems is taking until the end of February or early March. As a result, the IRS is not accepting tax returns that require specific forms. Most business and many individual tax returns are delayed.
Common Forms Delaying Business Returns
- Form 4562 used to claim depreciation and amortization deductions, is used by every business that purchased assets during the year. This revised form is not expected to be ready until March. This form is used by nearly ALL of our business clients delaying them from filing at this time.
- Form 4797 - used to report gains or losses made from the sale or exchange of business property is also delayed.
- Another is the popular form for parents with children in college - Form 8903 - Domestic Productions Activities Deduction is used by virtually every company in the manufacturing and construction business.
Common Forms Delaying 1040 Returns
- Form 8863 used to claim the two higher education credits is not yet released. The IRS says it should be available for filing in March.
- Form 8582 - refers to the Passive Activity Loss Limitation Schedule that is used by real estate investors and other taxpayers who make over $100,000 per year in adjusted gross income.
- Form 8283 - used by filers who wish to deduct noncash contributions made to a qualifying charitable organization. Deductions for noncash contributions are reported as itemized deductions. Noncash contributions can include securities, property, vehicles, collectibles or art.
What Does This Mean to the SMB (Small Midsize Business) Owner?!?
Although we can begin processing the majority of the tax returns right now, we can't finish many of them until the IRS is ready and our software is updated. We are expecting to extend all 1120-S and 1120 tax returns with depreciation. We may have no choice. The projected date the IRS will be ready to receive these returns is very close to the March 15th due date which will not give you, our valued client and signer of the tax return, enough time to review the return. If the IRS is ready and our software is updated by late February, we might be able to get them filed on time. We do not want to rush the process and inadvertently give Uncle Sam any of your hard earned money because of an over sight or a software glitch.
If you have any questions about timing of the filing of your returns please get in touch with us at 832-482-4240!