Fiscal cliff debate causes some delay in tax process

2/14/2013

By RACHAEL GRAY

By RACHAEL GRAY

rgray@gctelegram.com

With tax season about to go into full swing, local tax preparers soon will be busy.

The Internal Revenue Service began taking returns Jan. 30, later than the usual Jan. 15, according to David Hetrick, an owner of the local accounting firm Lewis Hooper & Dick.

"We're not as busy as normal — not yet," he said.

Since Congress changed the laws Jan. 2, Hetrick said, it has caused delays.

Processing some of the forms has been delayed until February or even March.

For instance, tax forms with deductions for education will begin processing today, Hetrick said.

The Kansas City Business Journal reports about 98 percent of Americans were able to file at the end of January, according to H&R Block officials.

Fiscal cliff discussions led the IRS to postpone updating its forms, as well as its programming and processing systems. While 70 tax breaks that were due to expire on Dec. 31 were renewed in the fiscal cliff deal, the payroll tax holiday was not extended, according to the Kansas City Business Journal.¬ 

About 2 percent of filers will be affected by the IRS' decision not to accept certain forms until February or March, the KCBJ reported.

The list includes forms for filers claiming credits for general business and depreciation and amortization. The form is used by businesses that want to depreciate the assets they claim as an expense. A business would file a depreciation and amortization form if it purchased new equipment in 2012, or if it had listed property, such as automobiles, that it wanted to report as depreciated, the KCBJ said.

Hetrick said the biggest change for business owners is the Code Section 179 deduction that lets a business owner expense the cost of equipment. Congress retroactively increased that from $139,000 to $500,000 for 2012 and 2013, he said.

"So what that means is if I'm a farmer and I bought a combine for $250,000, what the law said in December is that I can deduct $139,000 from that combine and there would be $111,000 that I couldn't write off, but could claim little by little for the next seven years. Well, they increased that, and now the whole expense can be written off for this year's income," he said.

Hetrick said most farmers in the area don't spend half a million dollars a year.

"So that means they write off everything they buy," he said.

Hetrick said his firm works mostly with business owners.

He said those will be opened up Monday, for the simple business returns that include corporations and partnerships.

"Again, those are just the simple ones. We're predicting the first week of March before we can do those," he said.

Jeannine Koranda, public information officer for the Kansas Department of Revenue, said the state has had 226,106 tax returns so far this year.

"Our main tip is for people to file their taxes electronically and have their refund submitted as a direct deposit. An electronic deposit gets the money back in people's wallets up to 80 percent faster than requesting a paper check. Almost 90 percent of Kansans filed electronically last year, and people can file their state taxes for free using KS Web File, which is available at http://www.ksrevenue.org/iiwebfile.html," she said.

comments powered by Disqus
I commented on a story, but my comments aren't showing up. Why?
We provide a community forum for readers to exchange ideas and opinions on the news of the day.
Passionate views, pointed criticism and critical thinking are welcome. We expect civil dialogue.
Name-calling, crude language and personal abuse are not welcome.
Moderators will monitor comments with an eye toward maintaining a high level of civility in this forum.

If you don't see your comment, perhaps you ...
... called someone an idiot, a racist, a moron, etc. Name-calling or profanity (to include veiled profanity) will not be tolerated.
... rambled, failed to stay on topic or exhibited troll-like behavior intended to hijack the discussion at hand.
... included an e-mail address or phone number, pretended to be someone you aren't or offered a comment that makes no sense.
... accused someone of a crime or assigned guilt or punishment to someone suspected of a crime.
... made a comment in really poor taste.

MULTIMEDIA