INDIANAPOLIS (WISH) - Tax experts say taxpayers can expect smaller tax returns, higher tax payments to Uncle Sam and a whole lot of unhappiness as a result of ongoing so-called fiscal cliff issues.
A number of credits and deductions have already expired or will soon expire. That will hit all Americans in the pocketbook.
Tax preparer Jim Geswein has been watching closely as the politicians in Washington D.C. delay, haggle and debate the fiscal issues. He expects this tax season will be an unhappy one for everyone.
"If you don't understand this — and a lot of people don't understand — it is all too complicated, I would come in concerned," said Geswein.
It is too early to know how the tax code will change. But a few things are for sure.
First, expect less take home pay. The Social Security payroll tax is going back up a couple percent.
"So another 2 percent goes out the window. So someone making $40,000 a year — that's $67 a paycheck" said Geswein.
Second, expect to see fewer credits and deductions on this year's tax form. For instance, Congress eliminated the adoption tax credit.
"I can think of a couple of customers over the years where that made an enormous difference to their return," said Geswein.
Third, getting a refund may take longer this year. Geswein expects processing time will take longer and electronic filing won't begin until Jan. 27.
"If you're planning to make that Feb. 1 rent payment with that check, I hope you get it but I don't think you are," said Geswein.
Things to think about as you prepare for the tax season:
- Start getting organized.
- Sort through receipts and important paperwork, and place them in one place.
- Figure out online or with the help of a tax professional if you have the right amount of tax withholding on your W2.
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