MESSY TAX SEASON DUE TO TAX LAW CHANGE
February 4, 2019 - Douglas Myser
Messy tax season due to tax law change. The Tax Cuts and Jobs Act not only lowered individual income tax rates, but it increased the standard deduction and increased the child tax credit, while capping state and local tax deductions and eliminating personal exemptions. Overall, the new tax changes, made it very difficult for taxpayers to determine the correct amount of tax to withhold. In fact, most people thinking they would get a big refund, changed deductions, and will find out they actually owe the IRS taxes once they file. Messy tax season due to tax law change.
"The IRS "expects more people than usual to owe taxes and penalties, including from people who usually get refunds," according to the Wall Street Journal. "Those most at risk of underwriting are people who used to itemize deductions but now no longer need to, households with two wage earners and people with complex situations, according to the IRS." These businesses and individuals need to call on a good Tax Resolution firm, that understands Tax Relief options in the Internal Revenue Code, including all of the options outside of and inside of the IRS Fresh Start Program. The partial government shutdown that lasted more than a month ended last friday, when President Trump and Congress agreed to reopen the government for three weeks while negotiating Trump's demands for border wall funding.
The IRS has said that it will process tax returns and issue tax refunds regardless of any government shutdown in 2019. But many experts say tax refund delays are likely this year, even if the government does not shut down again in a few weeks. Messy tax season due to tax law change indeed. What with the new tax laws in effect, the 2019 tax season would have been challenging for the IRS even without the government shutdown. And the shutdown has made things considerably more difficult for the IRS.
Over the weekend, the Washington Post reported that because of the shutdown, the IRS was unable to properly prepare for the 2019 tax season. Thousands of IRS workers still need to be trained or hired, and the IRS is facing a backlog of millions of pieces of mail from taxpayers that were never addressed during the shutdown.