TAX SEASON HAS STARTED
It feels almost unreal, but it is true – tax time is finally here. The filing season officially opened on Monday, January 28, which came with the added benefit of happening after the cessation of the government shutdown. Now of course, if this means the IRS was back up to full speed on that Monday is unknown, and there is the lingering threat that we may only be a short time away from another shutdown. Regardless, though, we are full on into it being time to file.
This current tax season carries an extra touch of unreality because it seems that we have been getting ready for it even before last tax season began. As soon as the Tax Cuts and Jobs Acts was passed at the end of 2017, last year almost became a prologue to when everything changed in 2019.
So first, when the agency reopened, it warned of phone delays. Phone delays are always a part of dealing with the IRS, so if it found them worth nothing, then that is a promise of some serious delay.
Second, there is word that when the IRS fully opened up for business again, there were five million pieces of unopened mail to deal with. How that matches up with the claim that there would be no delay in getting refunds, I cannot quite comprehend. Heck, I cannot quite comprehend five million pieces of mail in the first place. It has been stated that it may take the IRS a year to catch up on this mail.
Then there is the IRS’s rather large list of FAQs for taxpayers following the shutdown. There was too much there for me to even go into in this space. But if you have any questions, click here to visit the agency’s website and see what they posted (under numerous headings, so further click through to the area that addresses your interest). If you need any further guidance, please do not hesitate to contact us.
Advisement: You should be aware that while tax rates have come been reduced it does not necessarily mean you will not owe money on April 15. It is being publicized on various media outlets that due to withholding rates changing due to the decreased tax rates you may owe money due to taking home more money in your pay check. And they say the tax code was simplified. Personally, for some, for others more complexity. Each situation is different.
And yes, it’s true that in some way everything has changed. In all likelihood, your tax return is not going to look the same as it did last year. In other ways, though, not all that much has changed.
A big thing that should not change is the way that you prepare to file your taxes. Over the last couple of weeks, you have probably started to receive necessary tax forms in the mail. Hold onto them all. For some out there, it is true that they may not be as crucial as they were in the past (e.g. charitable donations may not matter if you now are taking the larger standard deduction), but you will not know if they matter or not unless you give them a shot. It is a good general rule that you can never have too much documentation.
Along those lines, it is now also time to get the paperwork together that does not come in the mail. This could be receipts, utility bills, or anything else that you ever used to prepare your tax return in the past. Yes, after we do this latest return it may turn out that some of those things are no longer necessary, but again, we will not know until we put all the numbers together.
For that is another thing that has not changed, our commitment to seeing that you file a tax return that uses the system to your greatest advantage. We hope that in the past you have been extremely satisfied with our work, and are confident that has been the case. And we work to see that you continue to feel that way as we work together under the new rules.
So get all those documents together now so we can continue on this journey. I know that it feels early before we even get to February (which can also mean that you do not yet even have access to all those necessary documents), but April 15th comes faster than we expect. I mean, it happens every year and still always seems surprising. So be proactive, and know that the sooner you make your appointment with us to get that return done, the better chance you have to get in at the times most convenient to you.
At least this is all happening early in the tax season where we have time to navigate it before the time crunch gets heavier. At the same time, though, I urge you to use it as a reminder to not procrastinate starting your prep work, even this early.
I do want to move away from the IRS now, though, and write about what we can do beyond taxes. Consider this an urging to not only get ready for tax season, but get ready for what you want to do after tax season.
This is the time of year when almost everyone is paying more attention to their finances. These early months see us recovering from the holiday season, possibly making some resolutions for how we will handle our money, then looking at some year-end numbers when it comes to taxes.
But come May, it is so easy to let all of that fade into the background.
So if you are reading this and thinking about what you need to gather for when we meet to discuss your tax return, why not also bring something that we can talk about for beyond tax season. We will already be discussing your financial picture, so why not look toward its future?
We may not have the skills to help you with every question that comes up in this realm, but we are confident that we can at least connect you with people who can help. It is likely, though, that we do have the skills to help you with those issues and get you where you need to be. And at that point, we are already breaking down some numbers, so it could be that the work has already started.
So what is there to lose? Bring us something extra about your future, and we will endeavor to add some comfort to that future. Don’t forget, call to make your annual appointment and we will get together soon.