I love to do taxes. But I don't love last-minute tax law changes.
This is the time of year tax preparers are gearing up for tax season. To be ready, we have to educate ourselves. What new laws are in effect? What old laws have expired? What is Congress doing right now that may change the laws currently in place? What might happen for 2012?
For the past two years, Congress passed tax legislation in December, effective for the current calendar year.
While these changes were of great benefit to most taxpayers, it makes quite a scramble for tax preparers, software developers, and the IRS. Most people don't think too fondly at the mention of "IRS", but my guess is they were not too happy about these last minute changes. It's just so inefficient.
Perhaps you remember that last year e-file was delayed about a month for some tax returns. Certain deductions and credits that expired were extended and the IRS had to update their software to reflect current laws. It took the IRS several weeks to get those new tax laws programmed into their system. That's really isn't too bad if you consider the scope of the project. The cost must have been enormous. Private software companies had to make the same last-minute changes to their software. No doubt the cost is passed to the consumer. Tax preparers were left with unhappy clients and unfinished returns until the changes were implemented. Again, it's inefficient and unnecessary.
Though I wouldn't give up the tax changes that were passed at the last minute, I do wonder why they couldn't have been passed earlier. My Christmas list this year includes a rule that all tax laws should be in place before the tax year begins. I know it won't always happen, and in certain cases it shouldn't. But wouldn't it be nice?