IRS Refunds Delayed - New System to Prevent Fraud

IRS States Refunds Will Be Delayed

“When can I expect to receive my refund?” is the most frequently asked question I get. This year, the IRS is not producing a 2013 IRS e-file refund cycle chart for tax professionals to answer the question. The commonly used chart has been discontinued and Publication 2043 has been dramatically revised due to IRS uncertainty about issuing refunds. The IRS states “In a change from previous filing seasons, taxpayers won’t get an estimated refund date right away.” From a customer service standpoint, this presents a problem in managing my clients expectations. The IRS states that “most taxpayers will have their refunds within 23 days”, a significant delay from recent years.

The delay in issuing refunds is due to a new processing method with an emphasis on FRAUD. The IRS’s new processing method includes multiple fraud checks based on the information in your tax return. Tax returns will be analyzed for what the IRS calls “Incoming transactions” and placed in a different category for funding. The IRS has not stated what denotes an incoming transaction but it could be anything from a change in dependents to a change in address. The IRS has fraud filters built into their new system and they don’t truly know what category the tax returns will fall into based on the filters in place at the time of review and how many returns are going to be delayed. Those filters could change throughout the tax season.  It apears that the IRS’s priority has shifted from getting you your refund quickly to fraud prevention and identity theft.

So, unfortunately, I may not have an answer for you as to when to expect your refund, other than approximately 23 days out from the time of filing.   

Remember to use this BLOG to check your refund status.  ou may click on the "Where's My Refund" button on the right hand side of the blog page, and it will take you directly to the IRS website.  Follow the instructions from there.   Have a great week and I will keep you updated on any other new changes!

2013 Electronic Filing Opens January 30!

Due to the late changes in the tax laws, the Electronic Filing Season opens later this year - January 30.  Most simple individual tax returns will be able to file on that day.  Other returns that have more intense deductions and other complicated type of returns will not be available until the end of January and into February.  When changes are made to specific forms, such as Schedule D, Capital Gains, the Internal Revenue Service does not approve the forms for electronic filing until it meets standards and calculations can be done correctly.

As always, there are no electronic filing fees.  I charge by the form and the fees are the same for all clients.  There will be a slight increase in fees this year, but if you compare my rates to my  competitors with the same credentials, I am usually 2/3 less than their fees.

Call soon for an appointment!  I look forward to visiting everyone this year!

2013 Final Tax Law Changes

Happy New Year everyone!  I hope your Christmas and New Years celebrations went well!  We spent the holidays at home, and the kids enjoyed it very much.  Then we spent New Years in Monterey/Pacific Grove, which was quite beautiful - sunny and a little bit cold!  It was nice being next to the ocean.  Well, Congress finally came to an agreement on the very last day of the year.  Here is a summary of the new tax laws that affect us this tax season:

1.  The federal estate tax, gift tax and the federal generations skipping transfer (GST) tax will continue to have $5,000,000 exemptions, indexed for inflation. The estate tax, gift tax, and GST tax exemption amounts were $5,120,000 for 2012. It is too early to know the level for 2013 because we will need to wait for the IRS to announce the inflation adjustment.  The highest rate will go up from 35% to 40%.  This is a permanent change to the law.    Note:  Technically there are multiple rates for estates under $5,000,000.  This will not affect most people but it can affect non-resident aliens with significant assets in the US or people who are otherwise not entitled to the full estate tax exemption.

2.  The income tax rates for 2013 are as follows:
Married Filing Joint                                                  Single
10% Bracket  $0-17,400                                         $0-8700
15% Bracket  $17,400-70,700                               $8,700-35,350
25% Bracket  $70,700-142,700                             $35,350-85,650
28% Bracket  $142,700-217,450                           $86,650-178,650
33% Bracket  $217,450-388,350                           $178,650-388,350
35% Bracket  $388,350-450,000                           $388,350-400,000
39.6% Bracket $450,000 and up                            $400,000 and up

The change here was an increase in the top rate for married couples earning $450,000 or more and individuals earning $400,000.  For Head of Household, I believe it is $425,000.  It also appears that these amounts are indexed for inflation.

3. Payroll taxes will increase 6.2%, reverting back to the levels of 2010.  This is the biggest hit for us all, as we will see less in our paychecks!

4.  There will also be a phaseout of personal exemptions for individuals earning more than $250,000 and couples earning more than $300,000.  Head of Household limit is $275,000.  This also appears to be indexed for inflation.

5.  Permanently indexes Alternative Minimum Tax (AMT) for inflation.  

6.  Capital Gains tax rates for 2013 go from 15% to 20% for individuals earning more than $400,000 and couples earning $450,000 or more.  It will stay at 15% for everyone else.  

7.  Extension for 5 years of the Child Tax Credit and $2500 for college tuition.

8.  Extension for one year of the accelerated "bonus" depreciation on business investments.

9.  Extension of tax free distributions from IRAs for charitable purposes.


I will keep you up- to-date on any other changes in the tax laws.

Call soon for an appointment, and let's gear up to get your refunds as quickly as possible!