Fiscal Cliff could delay IRS tax filing and refunds - KSFY News - Sioux Falls, SD News, Weather, Sports

Fiscal Cliff could delay IRS tax filing and refunds

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It's just about Christmas time, and while most of us have our minds on last minute shopping,  some of us are looking at last minute ways to increase our tax returns...

But, the looming fiscal cliff may affect our chance of getting a tax refund and when we can file.

KSFY News spoke with a tax preparer who said the IRS is waiting to see how the president and congress will handle the fiscal cliff or tax increases and spending cuts scheduled to take place on January first.

Depending what happens, the IRS will need time to catch-up.

John Reimer of Liberty Tax Service said "the average American will pay about four thousand dollars in taxes if nothing is done with the fiscal cliff."

Reimer said if you're expecting a tax refund next year, it may come a little later than usual.

"Most people might not be able to file until March. People used to getting refunds in January, aren't going to get refunds now until mid-February maybe even into the first of March," Reimer said.

The reason? The IRS can't do anything until congress and the president figure out how to stop us from going off the cliff.

"The IRS needs about three to four weeks on average to institute the changes made by congress and the president. Usually these changes are done in October, early November. The fiscal cliff is coming to a deadline on the 31st, so the IRS, they're basically sitting around waiting for the changes to get enacted," Reimer said.

And just who should be worried about the fiscal cliff and a potential tax increase?

"Married couples with a couple dependents. If nothing is going to happen, depending upon their income range, if it's over 200 thousand or 250 thousand, especially, they're going to be affected," Reimer said.

But it doesn't mean others won't feel the pinch as well.

"People making less than 250-thousand will not be affected as much as people making over that, but certainly they will see a certain tax increase if nothing is done," Reimer said.

If we go off the fiscal cliff, Reimer said all of us will be affected.

"Almost everyone will be affected, either by a tax increase, a refund delay, or possibly not being able to file their taxes like they're used to, like in January or early February."

Reimer tells us there's nothing any of us can do except wait and hope everything happens as it should.

He said with the expiration of the Bush tax cuts and alternative minimum tax (AMT), a tax designed to make sure the wealthy pay a minimum amount, more of us could see our taxes go up.

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