Well, since last week’s writing about
what to expect with taxes and the government shutdown, the IRS’s official plans
have been released. Some of them were as expected, and some of them were
surprising.
First, the expected part is that there will not be any
movement in the calendar for the tax filing season. Returns will begin to be
processed on January 28th with the standard end date of April 15th
applying for almost everyone. (Those in Massachusetts and Maine get an extra
two days due to their Patriots’ Day holiday on the 15th and the
Emancipation Day holiday on the 16th in Washington DC.)
But then a surprise came because the IRS also announced that
it would offer refunds to taxpayers as scheduled. This went against previous releases by the
agency about how it would handle a potential shutdown and after news of that
proposed plan started to be heard more in the general media.
It stands to reason that that increased knowledge
contributed to the change of plan. The longer the shutdown goes on, the more
people are going to be affected (and frustrated) by it, and the government
stood to receive increased backlash if many people were not receiving money
rightfully owed to them.
So the takeaway from this is much the same as I stated last
week – the government may be partially shut down, but your tax planning and
preparation cannot be.
And this is the case no matter where your politics lie, even
as taxes and politics promise to remain intertwined with a divided congress.
This came into light some last week when Senator Ron Wyden, a Democrat from
Oregon, sent a letter to IRS Commissioner Charles Retting asking the IRS to
waive penalties that will be associated with some tax bills that Wyden expects
taxpayers to face in the wake of the Tax Cuts and Jobs Act.
Last week, I said that I did not want to prognosticate about
when the government shutdown would end. This time, however, I do think that I
can effectively predict that Wyden’s pleas will not result in the IRS
forgetting or forgiving penalties if people do not pay their tax bills.
This is a deft political maneuver by Wyden because he gets
to show how he was a voice for people negatively affected by the TCJA before
they even filed their taxes. And sure, there are going to be taxpayers a bit
surprised when they get a tax bill not in line with what they’ve seen in the
past.
It is still a political maneuver, though, for I do not
anticipate there to be a great number of people seeing a huge tax bill of which
they were completely unaware. It does show the push and pull that is going to
continue when it comes to tax rules, though.
This further highlights the need to be prepared for your tax
return. You are not going to know exactly what your return is going to look
like until the tax year is over, but you can make very good guesses and be
ready for it. So no matter politics or shutdowns, take on your own situation
and know we remain here to help you do so.
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