IRS Might Be Closed, but Your Taxes Are Still Due (Maria Dryfhout/Dreamstime)
Friday, 04 January 2019 02:55 PM
The U.S. Internal Revenue Services is closed, thanks to the government shutdown, but your taxes are still due on April 15 and that is why individuals need to proceed through tax season as if nothing is amiss, experts say.
The opening day of e-filing traditionally occurs during the third week in January. This year, however, there is still a lot of unfinished business because of the Tax Cuts and Jobs Act of 2017.
One of the most complex changes in the legislation is how to calculate income for self-employed individuals or those with partnerships. Filers need to figure out something called qualified business income and run an algorithm for a new 20 percent deduction on this income, which has a lot of phase-outs and special qualifications.
It is "way more complicated than first blush would make it seem," said tax preparer David Tolleth in Holmdel, New Jersey.
When Tolleth looks at 2018 forms in his professional software, they are all still marked draft, including the main 1040 form. In prior years plagued by filing delays, Tolleth prepared returns and then sent them once the system was online.
"I’m hoping that will happen this year, but I don’t know," he said.
Jake Johnstun, an enrolled agent tax preparer from Ogden, Utah, is not trusting his tax software, especially when it comes to qualified business income.
Instead, he built spreadsheets with different variables and has been running numbers for a month and a half.
Johnstun is supposed to tape a panel discussion with three IRS officials in less than two weeks to explain the changes to tax professionals. But his slated experts are currently furloughed.
Click for Full Text!