Unintended Consequences

As a result of Congress waiting until the last minute to pass the American Taxpayer Relief Act, certain individual taxpayers will have to wait a bit longer than past years to file their income tax returns.

Yesterday the IRS announced that they would begin processing 2012 income tax returns for most individuals on January 30, 2013. However, due to time required for programmers to program tax law changes into their software, many individuals will have to wait until late February or early March to file their income tax returns.

Taxpayers that will have to wait until later in the filing season include individuals that have passive activity losses, depreciation deductions, and general business tax credits. Also taxpayers claiming the domestic production activity credit and the residential energy tax credit will be affected.

What Does Last Night’s Legislation Mean for You and Your Business?

Late last night, the US House of Representatives agreed with a previously approved Senate action and temporarily averted the much discussed “Fiscal Cliff.” According to White House statements, it would appear certain that the President will sign the bill.

In addition to the making permanent certain tax rate cuts originally enacted in 2001, many tax provisions which were scheduled to expire after 12-31-2012 were extended.
Below is our summary of some of the more significant of the actions taken in this legislation.