When are federal income tax rules for a given year firmed up? - Cash Commons

When are federal income tax rules for a given year firmed up?

2009-10-04T02:26:38Z

Each time I started up TaxCut while I was working on my taxes, it asked to check the website for updates. The reason: Tax laws change throughout the year.

My question is this: Is there a cut-off date where things are set in stone at the federal level for income tax rules?

I'm guessing it's no earlier than the end of January for the previous tax year (i.e., January 31st, 2010 for the 2009 taxes) because that's how long employers are given to send out W-2 forms. I suspect it can't be after April 15th, 2010, either. But where in between?

Answer by flicken for When are federal income tax rules for a given year firmed up?

2009-10-29T16:01:14Z

In theory, there is no set time limit. Congress can and does pass new laws that affect taxes well into the new year. For example, the American Recovery and Reinvestment Act of 2009, effective February 17, 2009, created a $8,000 tax credit for new home buyers that could be claimed on 2008 taxes. By purchasing a new house before Nov. 2009, your 2008 tax return could be changed.

In practice, Congress infrequently makes major changes to tax laws in the new year. The IRS needs time to prepare and distribute tax forms, while TaxCut and other electronic preparers need time for reprogramming.