WASHINGTON - The year's end is always a frantic time for tax preparers. This year, it's more frenetic than usual.
The tax-cut bill that gained final approval in Congress late Thursday and that President Obama signed Friday, coming so late in the year, has whipped up a mild panic for accountants, payroll staffs, and anyone else who handles taxes.
The IRS released new tax-withholding tables Friday, a little more than two weeks before the new year and the new tax rates begin. But payroll processors say the delay in the withholding schedules means the wrong amounts may be taken out of many workers' paychecks in the first few weeks of January.
The IRS gave employers until Jan. 31 to withhold less from workers' paychecks and until March 31 to return any excess that was deducted before their payroll systems were updated.
Accounting firms are rushing to advise clients, master the tax revisions, and update software.
Jim Bolek, an executive at Basic Payrolls Plus in Grand Rapids, Mich., which processes paychecks at 400 companies, says the delay in the 2011 tax-withholding tables has been giving him heartburn.
"It's a huge headache," Bolek said.
The pace of activity inside accounting and payroll offices has intensified because the changes are coming so late in the year.
The new withholding tables determine how much take-home pay ends up in paychecks starting next month. In most years, payroll processors and tax preparers say, they receive the IRS' withholding tables around mid-November.