Tax refunds will go out even if the government shutdown extends into filing season, the Internal Revenue Service said late Monday, and the agency will start accepting tax returns on Jan. 28.
The announcement comes after the acting director of the White House Office of Management and Budget on Monday said refunds would still be sent out during a shutdown.
The IRS plans to recall a “significant portion” of workers who have been furloughed during the shutdown to process tax returns. The agency will offer more details when it releases its shutdown contingency plan, expected in the coming days.
The shutdown could complicate what already will be a unique filing year that incorporates for the first time major changes to the tax code. Here’s what you should know.
3 big changes this year
This will be first year taxpayers will see how the tax law passed in December 2017 will affect their federal returns. The most significant changes are to the standard deduction, the state and local tax (SALT) deduction, and the child tax credit.
Bigger standard deduction: The standard deduction will nearly double for every filer from 2017: $12,000 for single and married taxpayers filing separately, up from $6,350; $18,000 for heads of households, up from $9,350; and $24,000 for married couples filing jointly, up from $12,700.
Capped SALT deduction: The new tax law limits how much you can deduct in state and local taxes to $10,000. Before, taxpayers could deduct all income, property and sales taxes they paid during the tax year to their state or municipality.
More credit for children: Another substantial change is the doubling of the child tax credit to $2,000 per child from $1,000. Taxpayers also can claim a new $500 credit for adult dependents. These credits phase out when a married couple’s income exceeds $400,000, up from $110,000 before.
3 ways to get ready
Gather documents: Print out a tax checklist and gather the documents as you receive them, such as W-2s from your employer and 1099s from your bank. Collect any receipts you plan to use to claim deductions for charitable contributions.
Pull out old returns: Take out a copy of last year’s tax return to help jog your memory on what credits you claimed and deductions you made. This will help you note key changes in your life that may affect your taxes, such as marriage, divorce, a new house, a new baby or retirement.
Anticipate changes: Use online calculators to help you anticipate your tax situation post-tax reform law. If you estimate you may owe Uncle Sam, you can still fund your IRA — until April 15 — to lower your 2018 taxable income.
Key tax dates
The tax deadline for filing will return to the traditional April 15 after falling on later dates in the past three years because of weekends and local holidays. Because of state holidays, Maine and Massachusetts taxpayers have until April 17 to file their returns.
Here are other important tax dates:
Jan. 15: If you’re self-employed, fourth-quarter 2018 estimated tax payments are due.
Jan. 31: Deadline for employers to mail out W-2 forms and for businesses to send 1099 statements, which report non-employee compensation, bank interest, dividends and distributions from a retirement plan, and help calculate your total taxable income.
March 15: Heads up, incorporated gig workers! Tax returns for LLCs and S-corporations are due.
April 15: This is the last day you can file your taxes electronically or postmark your paper taxes.
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