Filing taxes last year was a nightmare for taxpayers, their accountants and the Internal Revenue Service. This year might not be much better.
The IRS is still working to issue guidance for the changes to the tax code signed into law more than two years ago. Congress also passed a series of tax breaks late last year that will require the IRS and tax software providers to revise forms at the last minute, and taxpayers may have to amend returns from prior years to claim those breaks.
It also might be another disappointing year for taxpayers expecting a hefty refund.
“I hold my breath for the entire filing season and breathe a sigh of relief every April 15,” said Robert Kerr, the executive vice president of the National Association of Enrolled Agents, a group that represents tax preparers.
There are a few bright spots. The IRS made it through one filing season with the changes from the 2017 tax overhaul, which greatly revised the tax code for individuals, small businesses and corporations. And unlike last year, the IRS won’t be facing a government shutdown forcing the agency to spend the final weeks of preparation with a bare-bones staff.
Still, tax preparers are bracing themselves for the 2020 filing season, which runs Jan. 27 to April 15.
“I don’t think we know enough or learned enough last year to say this year is going to be substantially easier,” Mike Greenwald, a partner at accounting firm Friedman LLP, said.
For many accountants, the crunch isn’t concentrated just in the spring anymore. The new busy season now includes fall deadlines, reflecting the increased number of people filing on the extension due date to have more time to comply with new complex rules for pass-through entities.
Refunds could take a while to reach taxpayer bank accounts, as the IRS clamps down on fraud. The agency has to wait until at least Feb. 15 to send refunds to taxpayers who claim the earned income tax credit or subsidies for health coverage. The agency said taxpayers who file at the start of the filing season can expect those as soon as the first week in March, as long as there are no problems with the returns.
The IRS recommends submitting a return electronically and requesting the refund via direct deposit, rather than check, for the quickest turnaround time.
Taxpayers who weren’t happy with the size of their refunds last year could be similarly disappointed this year unless they changed the amount of tax withheld from their paychecks.
Davison writes for Bloomberg News.