For all you procrastinators, there are now some ready-made excuses not to file your 2012 income taxes as soon as possible.
Thanks to the protracted negotiations that led to last month’s passage of the American Taxpayers Relief Act of 2012 (a.k.a. the fiscal cliff bill), the Internal Revenue Service has had to prepare new tax forms and develop and test software programs to accommodate the slew of last-minute changes Congress made to the 2012 tax codes.
The changes within the 157-page law already forced the IRS — which this year expects to handle about 147 million individual tax returns nationwide, including 3.3 million from Massachusetts — to delay by eight days the start of this year’s electronic tax filing season for most Americans, from Jan. 22 to Jan. 30.
The IRS still needs time to prepare dozens of other forms and software programs for new and retroactive tax exemptions, credits, and other provisions tucked into the fiscal cliff bill, passed by Congress and signed by President Obama in early January after months of partisan wrangling.
As a result, about 27 million Americans won’t be able to file 2012 tax returns until late February or even March, as the IRS tries to ready and distribute all the necessary forms.
“The IRS notified Congress a number of times what could happen if they didn’t reach [a tax] deal before the end of 2012,” said Barry Beck, an accountant at Barry Daniel Beck CPA in Lynnfield. “They warned that they needed tax-code changes by the fall if they were going to get forms out on time. But the politicians continued to babble till the last moment.”
The delayed forms cover about 30 tax provisions, according to the IRS, including the general business tax credit (Form 3800), the mortgage-interest credit (Form 8396), the work-opportunity credit (Form 5884), and, not to be forgotten, the “Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands” (Form 5074).
There are also a number of energy related tax forms awaiting final processing, such as for residential energy credits (Form 5695) and for plug-in electric car credits (Form 8834).
“There were a lot of last-minute changes,” said Peggy Riley, a spokeswoman in the Boston office of the IRS. “Some of them we anticipated, others we couldn’t anticipate.”
The IRS is getting unexpected sympathy from unexpected sources: tax lawyers and tax accountants, who often knock heads with the revenue agency on behalf of their clients.
“It was a moving target for them,” said Mark H. Misselbeck, an accountant at Katz, Nannis + Solomon PC in Needham.
“The IRS couldn’t know what would ultimately pass and what wouldn’t pass.”
Most attention surrounding the American Taxpayers Relief Act focused on tax-code changes for 2013, such as hikes in the capital gains, dividends, and top-income tax rates.
But tax specialists advise people to consult with their preparers about retroactive changes made to 2012 codes.
Here are some of the major provisions that tax specialists say people should be aware of when filing their 2012 returns:
■ Alternative minimum tax. Decades ago, Congress passed the “alternative minimum tax” to ensure that affluent Americans didn’t use loopholes to avoid paying any taxes at all, but it was never indexed for inflation.
Lawmakers every year have had to approve temporary measures to prevent middle-class Americans with a lot of deductions, such as children, from being counted among the wealthy and getting hit with higher taxes.
In the recent fiscal cliff bill, the new AMT standard exemption, usually applied only to high net-worth individuals and couples who otherwise have numerous deductions to declare, jumps to $50,600 from $33,750 for individuals and to $78,750 from $56,600 for married couples. The recently enacted tax deal also indexes the AMT threshold to inflation.
■ American Opportunity Tax Credit. The credit provided up to $2,500 in credits for expenses incurred during the first four years of college, but expired at the end of 2011. The fiscal cliff deal reinstated the credit for 2012 and through 2015, according to the IRS.
■ Child tax credit. A $1,000 credit for dependent children under 17 was due to be cut to $500 in 2012, but the fiscal cliff deal keeps the credit at $1,000 for 2012 returns.
As April 15 approaches, tax specialists say there’s no way for even the most diligent taxpayers to file their returns until the IRS irons out its tax form and software problems. Of course, procrastinators probably won’t mind having a few more weeks of guilt-free delays.
“We’re going to be filing a lot of taxes later than normal this year,” said Scott Kaplowitch, an accountant at Edelstein & Company LLP in Boston. “It’s going to be a real crunched tax season, real hectic.”