AVON — Between fiscal cliffs, debt ceilings, and the postponement of tax filing deadline, Hoosiers may be feeling a bit taxed when it comes to paying them. But most of Indiana’s residents likely won’t see terribly big changes, at least this year.
The Internal Revenue Service (IRS) has postponed the start of its filing period until Jan. 30. And Vic Ruthig, owner of the Liberty Tax Service branch on Rockville Road, said the late filing deadlines have strapped many Hoosiers.
“Traditionally, it’s always been the second Friday after the new year, so this year around the 11th,” Ruthig said. “The IRS’s position on it is that because of all of the changes in the fiscal cliff legislation, they haven’t had a chance to get all of their systems ready to go.
“It’s been a tough economy since 2008. The government has set an expectation that in January, people can get their money. Now people call up, and they’re crying, they have bills they’ve got to pay, they planned on getting their money in January. If you’re living on a budget and you use that money from your refund to fund certain things in life, it’s a problem.”
Ruthig said he hopes that last year’s events of the IRS crashing isn’t a harbinger of things to come. He said the IRS typically does 15 percent of its total season’s volume in one day. Around 300,000 tax returns were lost last year because so many people filed as soon as they could.
As for the fiscal cliff and the role it will play, he said most of the tangible effects will come in your paychecks.
“The additional 2 percent tax that you can see right now on your paycheck, that affects everybody now,” he said. “The second place where it’s going to effect people is next year, the way dividends are taxed. They’ll be taxed at a higher rate. There will be additional taxes on capital gains where you’ll be taxed higher if you sell a business, stocks, bonds. There are taxes hidden all through the fiscal cliff legislation that effects people in different ways. A lot of the curiosity and anxiety comes from not having the time to look through and figure out how it’s going to effect (people) personally.”