The 2019 tax season officially started on January 28, just after the government reopened. As the IRS begins processing tax returns, there are a few questions on most taxpayers’ minds. What does this mean for my taxes? Will there be delays in processing? How will the shutdown affect my projected tax refund amounts? What are the new laws that have been instituted and what do they mean? Let’s discuss these concerns to better understand how the government shutdown will affect tax returns.
How to File Your Taxes
In short, the IRS has advised taxpayers to file as usual. In early January, IRS Commissioner Chuck Rettig stated, “We are committed to ensuring that taxpayers receive their refunds, notwithstanding the government shutdown.” The New York Times stated that the Trump administration intends to direct the IRS to issue tax funds regardless of the previous or any future shutdown.
But despite these reassurances, there are indications that this tax season could be more chaotic than last year. Towards the end of the shutdown, The New York Times reported that tax preparers were “bracing for a tricky filing season” and advising tax filers “to be prepared for possible delays if they are due refunds.”
IRS customer service also took a hit during the shutdown. Taxpayers with questions who called the IRS for clarification were often put on hold for over an hour. IRS employees are still working overtime to address the accumulation of phone calls that piled up as a result. This makes delays more likely, even if the government continues to remain open in the coming weeks.
Complications Caused by the Shutdown
What complicates the picture further are the new tax laws that went into effect in 2017. The New York Times summed up the issues at hand: “The $1.5 trillion tax overhaul that took effect at the beginning of 2018 lowered individual income tax rates, doubled the standard deduction and eliminated or capped many personal exemptions and tax breaks, such as the state and local tax deduction. All told, the overhaul threw a cloud of confusion over the correct amount to withhold in advance from workers’ paychecks.” The same report cited a Congressional Budget Office statement about refunds—it “expects tax withholding to be lower during fiscal year 2018; that effect will be offset by higher tax payments (or smaller refunds) when taxpayers file their tax returns next spring.”
While the IRS appears to be getting back on track, the delays suggested by these reports and the looming possibility of another shutdown in 2019 could bring added stress this tax season. Luckily, there are resources in place to help you navigate the extra confusion in the 2018 tax season. IRS Solver is a resource that is particularly helpful if you will be filing your state taxes under the California IRS. In the event that you owe more than you expected, their IRS Payment Arrangement Program could help you manage payments by allowing you to pay back taxes over the course of 3 to 6 years. These services are available for issues affecting individuals (including audits, collection issues, appeals, and spousal tax relief) as well as businesses (trust fund recovery penalties). They can help you resolve questions like “Will the government shutdown affect tax returns for me” and any other questions you might have regarding your tax season. Contact them today to find solutions and answers to your tax questions.