An­other gov­ern­ment shut­down could de­lay your tax re­fund

The Reporter (Lansdale, PA) - - BUSINESS - Michelle Sin­gle­tary The Color Of Money

WASH­ING­TON >> 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 four out of five 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 due to 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 due to 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. Read­ers can write to Michelle Sin­gle­tary c/o The Wash­ing­ton Post, 1301 K St., N.W., Wash­ing­ton, D.C. 20071. Her email ad­dress is michelle.sin­gle­[email protected] wash­post.com. Fol­low her on Twit­ter (@ Sin­gle­taryM) or Face­book (www.face­book.com/ MichelleSin­gle­tary). Com­ments and ques­tions are wel­come, but due to the vol­ume of mail, per­sonal re­sponses may not be pos­si­ble. Please also note com­ments or ques­tions may be used in a fu­ture col­umn, with the writer’s name, un­less a spe­cific re­quest to do oth­er­wise is in­di­cated.

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