If you tend to procrastinate about filing your tax return, this is not the year to dawdle.
Usually everyone is fixated on April 15, when federal tax returns are typically due. But this tax season, Feb. 15 is the looming date on your calendar. That's the day when the temporary funding ends for the federal agencies that were shut down for more than a month over President Trump's demand for funding for a border wall. A failure to negotiate a border-security compromise by Feb. 15 could mean another shutdown, which would impact the IRS and the services it provides to taxpayers.
In an interview with the Wall Street Journal, Trump said there’s less than a 50-50 chance a congressional committee would come up with an acceptable deal. This uncertainty couldn’t come at a worse time. Already people are experiencing some angst over major tax changes made by the Tax Cuts and Jobs Act. Most of the changes in this legislation took effect in 2018 and will be reflected in federal tax returns filed this year.
The IRS said it expects to process more than 150 million individual returns for the 2018 tax year.
"I started doing my taxes and noticed the removal of personal exemptions,” one reader wrote. “How did I miss this news?”
There has been a lot of coverage of the overhaul of the tax code, but human nature is such that people often don't focus on various issues — like their taxes — until a deadline forces them to face the facts.
Another reader, a retired widow with a dependent child, wrote: “I did my taxes using TurboTax, and with all the new changes, my tax refund was $196, compared with $662 last year. I didn't change anything.”
There are a number of things that could result in a higher or lower refund. In previous years, you could claim a personal-exemption deduction for yourself, your spouse or your dependents. Personal exemptions are now gone, having been replaced by higher standard deductions and an increase in the child-tax credit, which grew from a maximum of $1,000 to $2,000 per qualifying child under 17.
For individuals and married couples filing separately, standard deductions increased from $6,350 to $12,000. The deductions for heads of household went from $9,350 to $18,000, and for married couples filing jointly, it went from $12,700 to $24,000. The total combined deduction for sales, property, and state and local taxes is now limited to $10,000 ($5,000 if married filing separately). Any state and local taxes you paid above this limit cannot be deducted.
During a normal tax season, if there aren’t any issues with your return and you e-file, you can get your refund in fewer than 21 calendar days. About 4 out of 5 refund recipients now choose direct deposit, which speeds up delivery of your refund, according to IRS spokesman Eric Smith. If you mail your return, it could take six weeks or more.
But this year is anything but typical. Although thousands of furloughed IRS employees were called back to work during the 35-day shutdown to process tax refunds, some staff were granted permission to skip work because of financial hardship.
"As in previous years, we continue to pay refunds within our normal time frames,” Smith said. “Taxpayers should continue to file their tax returns as they normally would.”
Whatever happens with the border-wall negotiations, you can go online at IRS.gov to check the status of your refund by using the agency’s “Where’s My Refund?” tool. You can also download the IRS2Go app on your mobile device to track your refund. You should be able to view your refund status 24 hours after you e-file, and after four weeks if you file a paper return.
For people claiming the earned-income tax credit (EITC) or the additional child tax credit (ACTC), the IRS says it can’t issue refunds before Feb. 15 anyway because of another law, the Protecting Americans from Tax Hikes Act.
"Some people have misinterpreted that to mean they can't even file until that date, even if they're ready. That's not the case,” Smith said.
The earliest that refunds related to EITC or ACTC will be available in bank accounts or debit cards is Feb. 27 if a taxpayer chooses direct deposit and there are no other issues with the return, according to the IRS. “Where’s My Refund?” will be updated with projected deposit dates for most early EITC and ACTC refund filers by Feb. 23, Smith said.
If your refund is delayed by a shutdown, maybe that’s a sign that it’s time to change how much your employer withholds from your paycheck so that you aren’t getting large refunds year after year.