Thousands of Iowans who file their federal tax returns early will have to wait a little longer than usual for their refund checks. Nationwide, the I.R.S. says about three-million people won’t get their checks until February because it took Congress so long to finish work on what’s called the alternative minimum tax. Jeff Strawhacker, a CPA in West Des Moines, says it’s creating a mound of paperwork — and headaches.
Strawhacker says: "With some last-minute legislation that’s just come through, there is some expectation that refunds may be delayed a little bit. The I-R-S is now working on reprogramming their computers, but they need time to test it. For those who normally file early, many not get their refunds as quite as quickly as they have in the past."
The alternative minimum tax, or A-M-T, was designed to prevent very wealthy taxpayers from paying too little, but Strawhacker says that burden has shifted. "Unfortunately over the years, it’s hit many people in the middle class. Now, before this last fix by Congress, it would’ve affected a lot more individuals than it normally has, but with the one-year patch they’ve put in, hopefully they’ll keep that from dipping too far down into the middle class," Strawhacker explains.
It might come as a surprise that some folks zip off their tax returns in early January and ordinarily would get their refunds well before February. Strawhacker says it makes sense to file early and to avoid the April rush, especially if you’re due money back from Uncle Sam.
Strawhacker says: "The real key to effective tax preparation is having your records organized, so that you know what’s going on through the year and you can find those records. Taxes are not necessarily just a one-time-of-the-year event. You really need to be monitoring them throughout the year so as things change in your life, they may have impact on your tax liabilities and you need to address those as they happen." For full details on the A-M-T situation, visit the I.R.S. website .