Despite the government shutdown, the Internal Revenue Service (IRS) announced that tax returns will be processed beginning January 28, 2019. The IRS stated its commitment to ensuring that taxpayers receive their refunds in spite of the government shutdown. In 2011, the Office of Management and Budget (OMB) directed the IRS to not pay refunds during lapse. But this year, at the Treasury’s request law was reviewed that allowed IRS to pay tax refunds during lapse. To start the tax season, the IRS will recall a portion of its workforce back to work who are currently furloughed. As always the IRS will accept and process individual tax returns as soon as filing season begins. Taxpayers are urged to file as soon as they have all needed documentation to file a complete and accurate return. You have until Monday, April 15, 2019 to submit your 2018 tax return.
Tax rates, brackets and inflation adjustments
The government shutdown takes place during a busy time when the Tax Cuts and Jobs Act of 2017 (TCJA) will be implemented. Due to the TCJA, last year you noticed more money in your paycheck as your withholding went down. As a result, taxpayers may receive a smaller refund or owe an unexpected tax bill when filling. Keep in mind, that the TCJA will suspend personal exemptions and double the standard deduction amounts. Those amounts changed to $12,000 for singles and separate filers, $18,000 for heads of households and $24,000 for joint filers. The TCJA will eliminate the individual mandate requiring taxpayers not covered by a health plan to pay a penalty. Finally, the child tax credit doubled to $2,000 per child from $2,000 and taxpayers can claim a $500 credit for adult dependents.
Contact our offices today so we can answer any of your tax return questions or schedule an appointment online to start the process of filling your return.