Paycheck Debacles
Lawmakers are working to keep the country from going over the "fiscal cliff," but already they have caused two snafus that will soon hit millions of pocketbooks—and maybe even the economy.
The first involves take-home pay, which could be lower than expected for many workers. Until Congress sets next year's tax rates, the Internal Revenue Service can't issue 2013 withholding tables, and employers in turn can't adjust computers and paychecks. Instead, many employers will be using the 2012 tables come January but will omit the two-percentage-point Social Security tax cut in effect this year.
(snip)
The other snafu is a certainty as well: a several-week delay in the coming tax filing season.
This exists because several fiscal-cliff-related tax provisions expired at the beginning of 2012. The most important is an adjustment to the alternative minimum tax; others include popular breaks such as deductions for state and local sales taxes, tuition and fees, and schoolteachers' expenses, plus the charitable individual retirement account donation for people 70½ and older.
(snip)
(IRS Acting Commissioner Steven Miller) warned that even if lawmakers manage to fix the expired provisions by year end, the start of the filing season will likely be delayed by four weeks. That's what happened in 2011 after lawmakers waited to renew several expired provisions until late in 2010. Usually the season opens around Jan. 15, so next year it will probably be pushed back to at least mid-February.
Meanwhile, millions of taxpayers who file early in order to claim refunds won't get their cash. At the same time, their paychecks might have taken a hit, and they won't yet know their take-home pay.
http://online.wsj.com/article/SB10001424127887324731304578189893611211054.html
= new reply since forum marked as read
