5 IRS Issues This Tax Season
This tax season looks to be the most interesting in recent memory. With the new tax laws, new tax forms and a partial government shutdown that affects the Internal Revenue Service this year’s tax season will be noteworthy to say the least.
Here are some of the issues that will come to the forefront this tax season.
Withholding – When the tax law changed the rates and eliminated exemptions the withholding changed as well. As a result, this year’s withholding may have resulted in larger paychecks, but that may mean a reduced refund or even a tax due at filing time. The impact of the changes really won’t be known until you file. There is a slight upside to this change. The IRS is easing underpayment penalties this year due to the changes in the tax law. So, you may not be penalized this year for not having enough withholding to pay your tax bill. Use this year as a barometer for next year and make changes to your withholding after you file if necessary.
Forms - The new tax forms have reclassified some forms as schedules that roll up into various forms that go to line items on the return. The front of your return will be a summary of schedules that determine your tax. Some of the schedules are brand new, like the Qualified Business Income Deduction, others are the same such as Schedule E, and Schedule C. These new deductions and new places for old schedules will be important in filing your return. Get familiar with them and it will make it easier to do your return.
Help – There is help for these new forms and schedules. Check with your local IRS office and they will have a list of taxpayer assistance centers.
Prepare – This year, more than any other, it is important that you have all your information together. Before you file or go to your tax professional check to see if you have all the documents necessary to prepare your return. Have the Health Care Form 1095-A?, All your receipts and income or a summary for your Schedule C together? Brokerage statements finalized? Be prepared and minimize the stress.
The Government Shutdown – This year is different from any in recent memory because not only of the tax law changes, but the partial government shutdown is affecting the IRS. The IRS will accept your return and your money. Refunds may be another story. The government will get the departments necessary to facilitate filing returns back to work as they will be deemed essential personnel, it will the departments needed to review and approve certain refunds that may not considered essential and therefore, not staffed. This will result in longer refund wait times at the very least.
The article below has some other insights to the upcoming season. Take a read and if you have any questions call us and we can assist you.
Brady & Co.