As if we didn't have enough reasons to stress, it's been two weeks since the government shutdown began and Americans are starting to worry about its potential effect on this year’s tax season. Many politicians will say the effects will be minimal, but those of us with experience in the tax industry can tell you that, depending on how long it lasts, it can be very drastic.
Should you be worried?
The short answer, yes! Here is a quick explanation on why you may want to pay attention and maybe even prepare for the worst.
“Delays in Refunds”
The first and most obvious reason to care about the current government shutdown is of course the potential delays in taxpayer refunds. The last shutdown that lasted 16 days back in 2013 caused delays in over 2 billion dollars in taxpayer refunds. Many people still remember the stress and headaches those delays caused. And if that wasn’t bad enough, the IRS has still yet to announce an official e-file date for the 2019 tax season.
What this means for you?
Well, if you are anything like most Americans, and were counting on receiving a refund to catch up on bills, stock up on groceries or even purchase a new home, that money may not be coming as soon as you may thought. And on the other end, if you owe taxes, you are still expected to pay on time.
"Delays in Advance/Loans"
Another negative effect of this shut down is the complication and/or delay in Refund Loans. You see, in previous years many taxpayers have received help in the form of refund advance loans offered by select tax preparation firms well before refunds have been released. These advance loans usually get disbursed once the IRS accepts the e-filed return into their system. However, the IRS has yet to announce the official e-file date for tax year 2018. This is very alarming since the advance loans that are meant to alleviate some financial pressures while taxpayers await their full returns, are contingent on the IRS actually acknowledging and accepting those returns.
Many were already expecting delays due to the new tax law changes signed into law by President Trump last year. However, the current government shutdown is bound to further these delays if no resolution is found very quickly. And with Trump still at odds with the Democrats over Immigration policies and funding for the border wall, it’s safe to assume we’re in for a long one.
"The Good News"
With so many reasons to be financially stressed going into the New Year, there is some good news to share. A few very experienced professionals in the industry have actually anticipated all of this and even prepared very well for it. Like tax preparation firm 5 Star Tax™ in Palm Beach County, FL for instance. As always, they offer advanced refund loans at no cost to the taxpayer, to help alleviate the stress and headaches of an IRS tax season delay. However this year, 5 Star Tax™ will even be offering these advanced loans well before the IRS even acknowledges and/or accepts the return. This will make all the difference between starting the year fresh and stress free, or dragging last years troubles into the New Year.
Be sure to contact a tax professional ASAP in order to plan ahead, in the event this shutdown does indeed cause drastic delays in the filing season as well as millions of refunds. For more info on the tax refund advance loans visit www.5startax.com or call 561-420-0773 to stay ahead of the curve.
Written By: Stevens Ewald 1/2/2019, Executive tax preparer for 5 Star Tax Inc.