TODAY YOU ARE HERE TO HELP US PREPARE FOR A POTENTIALLY BUMPY TAX SEASON. WHY?
Even though the federal government has reopened for three weeks, the shutdown is expected to have ripple effects for taxpayers. The lack of funding for the IRS prevented large swaths of the agency from operating during a time its worker receive training and prepare for their busiest time of year.
And despite the White House calling 46,000 I.R.S. employees back to work, it will take time to get operations back up to speed ,according to the president of National Treasury Employees Union. All of this is compounded by a reduction in IRS funding before the shutdown and the fact that IRS staffers are still adjusting to the new tax law passed in December of 2017.
WHAT SHOULD WE BE PREPARED FOR AS A RESULT OF THESE ISSUES?
One word: delays. The IRS – like many other agencies – is playing catchup as workers try to deal with business left unattended to during the longest federal government shutdown in history. According to a recent New York Times article, responses to written correspondence to the agency have been delayed, just 1 in 5 callers trying to reach the IRS Automated Collection System have been able to get through to a representative, and hold times have been as long as an hour. In addition to this, the changes tax code mean it may take longer for staffers to provide assistance to taxpayers and address problems that arise.
So, while the IRS expects refunds to be issues on schedule – usually within 3 weeks of receiving returns if they were filed electronically and paid by direct deposit – they may, in fact, take much longer. Considering 3 in 4 returns result in a refund, and many people rely on this money, some Americans could feel the pinch if refunds do not arrive in a timely fashion.
SPEAKING OF DELAYS, WILL THE FILING DEADLINE BE PUSHED BACK?
Unfortunately for everyone who was hoping to delay their filing, the filing period will remain the same. The IRS will begin processing federal tax returns today, and for most taxpayers Monday, April 15 is the filing deadline. For lucky listeners in Massachusetts and Maine, you have until April 17 to file, due to Patriot Day on April 15 and the celebration of Emancipation Day in Washington, DC on April 16.
IS ANYTHING ELSE COMPLICATING THIS FILING SEASON?
Beyond the shutdown, the new tax law has created a lot of uncertainty around withholding and deductions. While the law increased the standard deduction for individual and couples, it also eliminated or reduced several of itemized deductions. These changes to the mortgage interest deduction, and the state and local tax deduction, for example, may mean some people have not withheld enough money throughout the year to cover the amount of taxes they owe. This could end up surprising some Americans.
However, the I.R.S. does have some good news for people who end up in that position: this year only, if you didn’t withhold enough, the IRS will waive the penalty for many filers who have underpaid.
THAT IS GOOD TO KNOW! ANY OTHER PIECES OF ADVICE FOR A CHAOTIC FILING SEASON?
The best thing you can do is get organized and get your returns in as early as possible. First, gather all your documents: employer forms – most likely a W2 – or a 1099 if you are self-employed; any documents for deductions such as receipts from charitable donations, tuition bills; and your investment and retirement contribution statements. Then work to get your return file, you are less like to fall victim to tax scammers and more likely to get ahead of the crowd and get your refund back on time!
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