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Fiscal cliff resolution affects start of tax season

Last week the federal government backed away from the fiscal cliff, at least for the time being. But it took so long to find a short-term solution that this week the IRS announced that the start of the tax season will be delayed by eight days this year.

The delay will not really affect any of the substantive issues that can come up between taxpayers and the IRS concerning federal income taxes. But it shows just how much the agency is affected by what Congress and the president decide about tax law changes.

The IRS had been ready to start processing individual income tax returns on January 22. With the 8-day delay, it will now begin doing so on January 30.

The delay does not mean, however, that taxpayers get extra time before their taxes are due. The deadline for filing federal income taxes remains April 15.

Of course, for taxpayers eager to get their federal tax refunds, the 8-day wait is not welcome news. Given the host of tax issues on the table before the fiscal cliff deal, though, the delay could potentially have been much longer.

This is because it wasn't only income tax rates that needed to be resolved. There were also issues involved regarding payroll taxes (also called employment taxes) and the alternative minimum tax.

In addition, the fiscal cliff deal also addressed a number of specialized provisions concerning tax credits. Taxpayers affected by those provisions, such as for vehicles that use alternative fuel, will likely need to wait even longer before they can obtain appropriate forms from the IRS to calculate their taxes.

Source: "IRS to open tax-filing season 8 days later because of fiscal cliff," Los Angeles Times, Jim Puzzanghera, 1-9-13

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