If I want to file my taxes on Jan 4 2013, could I do so? Does the government understand what my rate will be? My deductions? If I go and file, can the IRS change the rules on me later on and demand additional payment, even if I do everything "correctly" the first time?
What are the odds that this is 100% Kabuki Theater and that the IRS knows precisely what the situation will be for tax filers, and has known the final endgame for months?
Yes. The tax law changes from the fiscal cliff are for the 2013 tax year. You would be paying taxes for the 2012 tax year, and those laws are already settled.
The changes you would see for 2013 would start with your first paycheck. The tax witholding would be higher in expectation of you paying higher taxes, and you would have the full 6.2% taken out in FICA (Social Security) taxes, rather than the 4.2% from the prior two years.
Neither of these two items will have a major impact, because people don't spend extra money they get in tiny quantities, and they don't generally miss tiny quantities either. Also, the feds could simply decide NOT to change the witholding, in expectation that a deal will be reached at some point and will be retroactive.
In reality, I would fully expect that on both the two big bills that need to be fixed (the reversion of the tax code to 2001 levels, and the sequestration from the debt limit bill) will be fixed retroactively, so whatever the fix is, it will end up apply for the whole year.
For that reason, the pressure to fix things before January 1st is really minimal. Obama has already announced that he will NOT be changing any spending patterns in the first couple of months of the new year (despite the loss of spending authority -- which means he'll have to make bigger cuts later if they don't change the law), and the tax changes just hit poeple a little each week, and only if the administration doesn't play with the withholding.
In some ways, January 1st is a fake deadline.