Tax Filing Season Has Officially Begun: Here’s What You Should Know
Tax season has officially begun as of January 28, but the historic 35-day partial government shutdown may cause some delays, according to Forbes.
According to new reports, the IRS has an estimated backlog of more than five million pieces of mail to answer. At some parts during the shutdown, the IRS received an all-time high of 700,000 pieces of mail per day.
This high volume is, in part, a result of the government shutdown. As taxpayers began looking for preparation assistance for the 2018 tax season, there were few people to answer their queries. Tax professionals couldn’t work to answer taxpayer questions and with the fax lines, phone lines, and assistance centers closed for the shutdown, all of these questions had to be sent to the Internal Revenue Service by mail.
Forbes estimates that this backlog could take more than 25 days to handle, and that’s only if the IRS hires more people and increases their budget. Unfortunately, this option is unlikely. The IRS has already prompted taxpayers to reschedule appointments made before the shutdown. It’s far more likely that the backlog takes almost a year to be fully resolved.
The government shutdown has created a hectic start for this year’s tax season, but the new Tax Cuts and Jobs Act might make it a little more difficult.
This is the first year that the act is in place for taxpayers. It essentially doubles the standard deduction and limits itemized deductions, including a $10,000 cap on tax deductions at the local and state levels.
As such, fewer people are expected to itemize when filing their taxes this year and more parents are expected to benefit from the increased child tax credit. It’s estimated that only 10% of households will itemize deductions.
However, there may also be fewer audits. During the month-long government shutdown, the IRS was unable to conduct any new audits. By putting court hearings and collection activity on the backburner during the shutdown, this tax season is expected to be a long one.
Just because the IRS hasn’t audited you, however, doesn’t mean you’re out of the woods just yet. The IRS can audit a business tax return within three years of filing and it can also collect on back taxes owed for up to 10 years.
As the IRS picks itself up by the bootstraps, we’ll have to brace ourselves for a drawn-out season.