When it came to tax refunds from the IRS in the past, an individual could always check the IRS website to determine if the tax return had been processed and the date to expect the refund. Not 2013. For the 2012 tax year filing season, the IRS has updated their website to only give you the information on when your tax return was processed. Per their correspondence, they are no longer giving the expected the refund date on their website.
The “Debt Ceiling” is one of the reasons why the IRS will not give the expected refund date. In other words like many State Revenue Departments, the IRS doesn’t know when they will have the money to refund the overpayments that individuals have paid in 2013 if the Treasury Department can no longer borrow money after mid-February affecting millions of taxpayers.
Just last week, the IRS was indicating that they would not be processing returns until Mid-February or Mid-March because of the “Fiscal Cliff”. But Congress stepped in and saved the country from the short-term effects of the “Fiscal Cliff” at the last-minute. Sure we can all breathe a sign of relieve unless you are one of the millions who needed the 2% temporary tax cut you were getting from Social Security or making over $400,000 (single), $450,000 (married filing jointly). However, they did not permanently fix the “Debt Ceiling”. They only put a wet band-aid on the problem for a few days which means there are a lot of uncertainty in government offices and contractors as to what happens when the Federal Government hits the “Debt Ceiling”.
One of the effects from almost hitting the “Debt Ceiling” will be a delay in issuing tax refunds which is why the IRS website is not listing the expected refund date like many States do. I recommend completing a new W-4 to change the withholding if you are expecting a large refunds. Getting more money back throughout the year seems to be better than treating the IRS like a “Christmas Club Account” for your hard-earned money and getting a large refund back once a year. Wouldn’t you rather get more of your money throughout the year instead of a large tax refund at the end of the year?
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