Fiscal cliff slows income tax filing
By Chris Buckley
Published: Wednesday, Feb. 6, 2013, 12:01 a.m.
In his offices in Carroll Township, tax preparer Pete Jenkins has six files of tax returns in different stages waiting to be filed.
“I'm preparing taxes and getting them ready, but I can't file them yet,” said the owner of Pete Jenkins Tax, Accounting and Financial Services.
“Some are filed, some are waiting for one form, some are waiting for two forms. This is all due to the fiscal cliff not being rectified until the last minute.”
Washington's dangling act with the fiscal cliff deadline has created a delay for tax preparers.
Congress passed the American Taxpayer Relief Act of 2012 on Jan. 1. The Internal Revenue Service needed four to six weeks to reprogram its computers for the tax law.
The IRS began accepting some tax returns Jan. 30, but 30 various forms won't be accepted electronically by the IRS until late February or early March, Jenkins said.
Among the more popular forms on hold are: 4562, Depreciation and Amortization – nearly every business client uses this form if he or she has purchased new equipment; 5695, Residential Energy Tax Credits; and 8863, Education Credits (American Opportunity and Lifetime Learning Credits).
Jenkins estimated that filing returns for about one-third of his clients has been put on hold.
Alice Stiles, owner of Stiles Tax Service in Dunlevy, said the IRS status has not slowed down her business so far.
“We've continued to get returns done and get them signed,” Stiles said. “We just can't e-file them yet.
“Anyone using forms that are not updated, we let them know the situation upfront.”
When taxpayers approach their returns this year, they will face some significant changes. In two instances, taxpayers in all brackets will feel a pinch.
The payroll tax holiday of 2011 and 2012 was allowed to expire. While all are seeing a 2 percent bite in their paychecks, Jenkins said the holiday expiration is likely good for Social Security.
“They had no business cutting that,” Jenkins said. “Social Security is in trouble and then to cut the employee contribution by 2 percent, that's ridiculous.”
The top tax bracket for single taxpayers earning $400,000 or more, or married couples filed jointly earning over $450,000 rose from 35 percent to 39.6 percent.
Two other tax law changes for 2013 will benefit taxpayers. The maximum gift tax exclusion rose from, $13,000 to $14,000. And the maximum contribution to IRAs rose from $5,000 to $5,500. Those 50 years of age and older can add an additional $1,000 to an IRA.
A five-year extension was added to the college tuition, earned income and child tax credits.
But for many businesses, this year is the time to begin planning for 2014.
Starting in 2014, businesses employing at least 50 that do not currently offer health insurance must begin doing so or face a $2,000 per employee penalty. Compliance under the law, a part of the Affordable Care Act, will be based on employee rolls in 2013.
Jenkins said some companies that do not currently offer health insurance face three potential decisions – offer health insurance for their employees, lay off workers to get under the 50 employee threshold or – for larger firms especially – incorporate into various divisions each with less than 50 employees.
Chris Buckley is a staff writer for Trib Total Media. He can be reached at 724-684-2642 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- It’s ‘Sammy Vasquez Jr. Day’ in Monessen
- North Charleroi man to stand trial for car thefts, arson charges
- Card theft claim lands Charleroi woman in trouble
- Drug suspect’s escape try fails
- Electric heater blamed for Charleroi house fire
- Marion promotes autism awareness
- Smithton native charged in Ohio with faking illness to raise money
- First Federal, Community Bank join
- Speers man facing drug charges
- Fire rips through Rostraver house
- Another Donora bank building getting new tenant