Government Shutdown and the Impact on 2018 Tax Refunds
The 35-day government shutdown ended just in time for tax season. Or did it?
January 28th was the official start of tax season. That’s the date the IRS began processing tax returns. Fun fact: if you had completed your 2018 return prior to that date with a software company or tax professional, your return wasn’t actually submitted until January 28th. Also, good for you! You are in the extreme minority of early filers.
There’s talk about the impact of the government shutdown and its effect on receiving 2018 tax refunds. According to the Trump administration, there will be no delays, and everything is set to arrive on schedule. Employees of the IRS and union reps recently told the Washington Post to expect delays, maybe as long as two months. What we do know is the IRS stopped several functions during the shutdown: audits, return examinations, non-automated collections, and legal counsel, among other operations. It’s a reasonable notion to deduce that employee time and energy will continue to be directed to that backlog, in addition to the new returns coming in.
It’s nearly impossible to predict what will happen here since this was an unprecedented event. What I can tell you is that we’ll know more as this month treks on. 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. For everyone who filed on the official start of tax season, they will be looking for their refund around February 18th. We’ll know then whether some of those refunds are being delayed. Time will tell.
It’s also worth noting that many of us have another crucial February date on the brain: February 15th. A failure to negotiate a border-security compromise by February 15th could mean another shutdown, which would impact the IRS and the services it provides to taxpayers. As always, the known ways to speed up your refund include e-filing your taxes and choosing direct deposit. If you mail your return, it could take six weeks or more.
I was recently asked if the shutdown bumped any due dates of when returns need to be filed by. No, the return due dates remain the same: April 15th for individual returns. If you live in Maine or Massachusetts you have until April 17th.
I’ll leave you with one last thought. If your refund is delayed by a shutdown, consider it a sign that you need to revisit your W-4 to ensure you aren’t waiting on a large refund year after year. You can put that money to better use throughout the year, like achieving your goals faster.
