Wednesday, October 23, 2013

Pent Up Something

Yippee! The 2014 tax season will start late - the IRS won't start accepting and processing individual tax returns until January 28 but certainly before February 4, 2014.  Or, maybe later. If something comes up.

In 2013, the IRS started accepted returns on January 30th which was a little more than a week after their expected start date of January 22nd. I guess it takes that long to get the computers warmed up. Probably, they run on Windows and have a lot of updates to download.

Even then, people who took a deduction for depreciation on their tax returns - which is anyone with a business or a rental property - couldn't file until February 10th. If you were taking an education credit, you couldn't file until February 14th. If you were eligible for another 29 credits, you could file until March 4th - just six weeks before all tax returns were due on April 15th. This, all due to the American Taxpayer Relief Act (ATRA) enacted by Congress in January.

Which makes January 28 - or February 4 - look freaking early! (By the way, it doesn't matter if you file electronically or on paper. The IRS will not process your return, until it does.)

Except, guess what? It doesn't really matter. You still have to file by by April 15th unless you extend and you might as well because you probably won't have what you need to file on time anyway. Employers aren't required to mail your W-2s until January 31st. If the Post Office is still open for business, you won't even get it until February 4th.

If you sold stocks, your broker isn't required to mail your 1099-B until February 15th but there's no deadline, that I'm aware of, for your broker to change the information on the 1099 and send you a corrected one later in the year if not all the information was available when originally prepared.

You won't get the K-1 reporting your interest in a corporation or partnership until the corporation or partnership files its return in March or as late as September if they file for an extension.

Which is why it all doesn't matter. Except if you owe money to the IRS. Then you have to do your best to estimate what you owe and pay it by April 15th whether you file your return then or later. And, if your withholding isn't high enough, you still need to make estimated tax payments against next year's tax return even if you haven't filed this year's tax return.

However, you can skip the last payment due January 15th if you file your 2013 tax return by January 31, 2014, and pay the rest of any tax you owe. Unless, of course, the IRS isn't accepting tax returns. Then, you're back to square one.
“In the days ahead, we will continue assessing the impact of the shutdown on IRS operations, and we will do everything we can to work through the backlog and pent-up demand,” Werfel said. “We greatly appreciate the patience of taxpayers and the tax professional community during this period.”
IRS.gov | 2014 Tax Season to Start Later Following Government Closure; IRS Sees Heavy Demand As Operations Resume
Pent up demand?

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