Now that the partial federal government shutdown has ended and a new tax law is in effect, a local financial planner is offering tips on best practices for taxpayers.
Michael Stewart, founder of Crystal Lake Tax & Financial services,
451 Coventry Lane, said the shutdown won’t have a major effect on people receiving refunds. The government reopened Jan. 25 after it was closed for 35 days.
“The government shutdown shouldn’t impact the processing of the returns,” he said. “Most returns these days are e-filed, so they’re taken care of electronically. The government has also stipulated that it won’t delay the process of refunds.”
Stewart said it takes about two weeks for refunds to be processed if a taxpayer opts for direct deposit. Checks take “a little bit longer – closer to a month,” he said.
When questioned about whether another shutdown could affect the time it takes the IRS to process documents, Stewart said, “It’s hard to say.”
“One of the ways they were going to avoid any delays with the refunds for individuals is that they were going to call back a large part of the IRS workers during the shutdown, even if they weren’t going to get paid,” he said. “If we happen to go into another government shutdown and those IRS workers are furloughed and aren’t coming in, there’s a good chance that at that point there may be some impact.”
Although President Donald Trump agreed to a stopgap bill to reopen the government until Feb. 15, he maintains that he will shut down the government again or declare a national emergency for border wall funding if Congress does not provide funds for it.
File sooner rather than later
Stewart recommends that residents file their taxes as soon as possible because “it’s kind of a first to the trough” system. He said people who wait are at risk of identity theft and waiting longer for refunds.
“You need to be diligent about it,” he said.
When questioned about the new tax law passed by Republicans, Stewart said two-thirds of filers will be “pleasantly surprised” at the effect of the law and one-third “dramatically impacted.”
Those “dramatically impacted” will be those who won’t itemize because the standard deduction has doubled.
“Some individuals maybe last year were writing off $30,000 and $40,000 itemizing, but this year, under the new tax code, there are caps on certain things they can itemize – mainly property taxes and state income taxes,” he said. “Those individuals might be taking the standard deduction and might get an unpleasant surprise.”