What a Compressed Tax Season Means for You

Tax season is never easy, and now it’s been delayed — the IRS has pushed back the beginning of tax season by 10 days. That does not mean that taxpayers should put off preparing their return, though.

Originally, this tax season was supposed to begin on Jan. 21, but now the start date is Jan. 31. Last year there was also a delay to the tax season as a result of the changes Congress made in the American Taxpayer Relief Act. This year, the government shutdown, which took place during the IRS’ advanced scheduled testing and updates of the system, according to H&R Block.

However, don’t look at the 10-day delay as an extension on tax season. This delay is only affecting the start, not when taxes are due. April 15, a date that is fixed by law, is still the due date for taxes. So you should take these 10 days to prepare your tax return so it can be e-filed on Jan. 31, as soon as the IRS opens its doors. After all, H&R Block reminds, the fastest way to get your refund is to file your return early.

Unlike the previous year, there is no suspense as taxpayers waited to find out what Congress would do with ATRA and which provisions would expire or be extended. Physician’s Money Digest covered at great length the many changes, especially as they affect high-income taxpayers.

Couples earning more than $450,000 (or $400,000 for individuals) now pay a 39.6% income tax, while capital gains and dividend taxes for these same taxpayers increased to 20%. The itemized deduction limitation and the personal exemptions phaseout were both reinstated. (Read about both here.)

This tax season will also be important for same-sex couples. The Defense of Marriage Act (DOMA) had prohibited the IRS from recognizing same-sex marriages for federal tax purposes, but the Supreme Court held that DOMA was unconstitutional. Subsequently, the IRS rules that any couples married in states recognizing same-sex marriage (regardless of whether or not the state they live in recognizes it) will be treated as married for federal tax purposes.

Todd Sandstrom from Longfellow Benefits explained the tax issues surrounding the removal of DOMA, in particular how couples in states that don’t recognize same-sex marriage will be affected.