Smaller Paychecks, Late Filing Await Taxpayers in January

Smaller Paychecks, Late Filing Await Taxpayers in January 
H&R Block Advises on Issues That Could Lead to Tax Sticker Shock 
KANSAS CITY, MO -- (Marketwire) -- 11/27/12 --  H&R Block Inc. (NYSE:
HRB) -- New Year joy could quickly turn into January sticker shock
for taxpayers surprised by smaller paychecks and little chance of
getting tax refunds in January. The main two reasons for this are the
end of the 2-percent payroll tax holiday that will make paychecks
shrink and the later-than-normal first day to e-file tax returns
having those expecting tax refunds waiting longer than usual for
them.  
"Taxpayers may be ringing in the new year with smaller paychecks and
a longer wait for their tax refunds," said Kathy Pickering, executive
director of The Tax Institute at H&R Block. "Typically, only 2
percent of January filers don't get a tax refund. Since many of the
taxpayers impacted by the delay will be those who use their refund
money to pay their rent and winter utility bills, that means those
who can least afford to deal with these issues will be affected the
most." 
Knowing what will cause the sticker shock can help taxpayers prepare
to make January less taxing.  
The party's over: payroll tax holiday ends Dec. 31
 Taxpayers will
see a 2-percent reduction on their paychecks starting in January. For
example, workers earning $40,000 (average annual income) will see
about $67 less in their monthly paychecks. This is because the Social
Security payroll tax will return to its regular level of 6.2 percent,
which was last applied in 2010.  
"When the payroll tax holiday started, taxpayers who could afford to
were encouraged to invest that extra money. For some, now might be
the time to review their saving strategies," Pickering said. "It's
also a great time -- before the end of the year -- to review
paychecks, meet with a tax advisor and fine-tune withholdings for the
new year."  
Late start of tax return processing means tax refunds arrive later
 A
survey by The Tax Institute revealed 84 percent of taxpayers didn't
know the first day to e-file is more than a week later than in
previous years. The Jan. 22 start of e-filing could mean the 18
million taxpayers who usually get their tax refunds before Groundhog
Day might not get them until Valentine's Day. These ear
ly-season
filers tend to get refunds 30-percent larger than the $2,700 average
tax refund.  
The IRS recently informed Congress 60 million taxpayers could face an
even longer delay if the alternative minimum tax (AMT) isn't patched
for tax year 2012. The IRS said these individual taxpayers might have
to wait until March to file their tax returns. 
"Higher taxes and fewer tax breaks could make it hard for some
taxpayers to make ends meet, especially if these changes catch them
by surprise," Pickering said. 
H&R Block, with 4,000 offices open year-round, At Home (R) online and
the all-new, face-to-face web solution Block Live(SM), offers
taxpayers multiple options to meet their filing obligations.
Taxpayers can call 800-HRBLOCK for more information or visit
www.hrblock.com to find an office near them, start their return
online or log in to Block Live.  
About H&R Block
 H&R Block, Inc. (NYSE: HRB) is the world's largest
tax services provider, having prepared more than 600 million tax
returns worldwide since 1955. In fiscal 2012, H&R Block had annual
revenues of $2.9 billion and prepared 25.6 million tax returns
worldwide. Tax return preparation services are provided in
company-owned and franchise retail tax offices by nearly 100,000
professional tax preparers, and through H&R Block At Home(TM) digital
products. H&R Block Bank provides affordable banking products and
services. For more information, visit the H&R Block Online Press
Center. 
About The Tax Institute at H&R Block
 The Tax Institute at H&R Block
is the go-to source for objective insights on federal and state tax
laws affecting the individual. It provides nonpartisan information
and analysis on the real world implications of tax policies and
proposals to policymakers, journalists, experts and tax preparers.
The Institute's experts include CPAs, Enrolled Agents, attorneys and
former IRS agents. 
For Further Information
Gene King
816-854-4287
mediadesk@hrblock.com 
 
 
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