Taxpayers urged to file sooner than later
HUNTINGTON — It’s tax filing season, and professionals around the country are urging taxpayers to file as soon as possible following the announcement that the federal government is only assured to be funded through Feb. 15.
“There is no guarantee that we will not see another shutdown, meaning the IRS could potentially be left short-staffed in the middle of tax season for an unknown duration,” said Mark Steber, chief tax officer at Jackson Hewitt Tax Service, which has five locations in the Tri-State. “There have been many things for taxpayers to be concerned about this year when it comes to taxes. From the largest tax reform in 30 years to a government shutdown lasting over a month, taxpayers who feel uncertain about their taxes this year are not alone.”
Surrounding the significant uncertainty, Steber says Jackson Hewitt recommends all taxpayers file early this year, even if the taxpayer is not used to doing so in the past.
“It is always advised to file early to protect against identity theft and more, but amid the temporary funding of the government, it is even more crucial this year,” Steber said. “In fact, due to the changes in the tax law, some people think it will take more time to file this year, which is even more reason to get started early.”
According to a recent Jackson Hewitt survey conducted by Research Now, 35 percent of taxpayers think it will take more time to file taxes this year than last.
The tax deadline of April 15 still remains. Taxpayers should not expect more time to file due to the government shutdown, Steber added.
This year also may prove to be a difficult tax season because of many changes to the tax code, wrote Washington Post financial columnist Michelle Singletary, pointing out that major tax changes enacted in 2017 could mean some workers might not have had their employers withhold enough from their paychecks.
The Tax Cuts and Jobs Act of 2017 (TCJA) brought numerous tax provisions that have been eliminated or modified for tax year 2018.
The new tax law nearly doubles the standard deduction amount. Single taxpayers will see their standard deductions jump from $6,350 for 2017 taxes to $12,000 for 2018 taxes (the ones you file in 2019).
Married couples filing jointly see an increase from $12,700 to $24,000. These increases mean that fewer people will have to itemize. Today, roughly 30 percent of taxpayers itemize. Under the new law, this percentage is expected to decrease.
The law eliminates the personal and dependent exemptions which were $4,050 for 2017 and increased to $4,150 in 2018. It also limits the amount of state and local property, income and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible.
The bill also caps the amount of mortgage indebtedness on new home purchases on which interest can be deducted at $750,000 down from $1,000,000 in current law.
The bill eliminates the tax penalty for not having health insurance after Dec. 31, 2018. It also temporarily lowers the floor above which out-of-pocket medical expenses can be deducted.
The bill has a myriad of changes for business. The biggest includes a reduction in the top corporate rate to 21 percent.
Meanwhile, West Virginia Attorney General Patrick Morrisey used the opening of tax season to urge consumers to protect personal information and exercise caution when preparing and filing their return.
Sensitive information like Social Security numbers, financial information, birthdates and addresses are among the many things scammers could easily use to their advantage.
“Scammers are aware of tax filing deadlines and could be waiting to take advantage of your personal information,” Morrisey said in a press release. “It’s imperative that consumers be mindful of how they handle tax information and who processes tax-related documents on their behalf.”
Morrisey says consumers can greatly reduce the risk of fraud by filing their return well before the April 15 deadline.
“This gives thieves less time to file a false return since IRS records would show a filed return in the consumer’s name,” he said in the release. “Consumers also should use a secure internet connection and never file their return via publicly available Wi-Fi.”
Unsuspecting victims of tax-related identity theft often receive a letter from the IRS saying it received multiple tax returns filed in the victim’s name or indicate the taxpayer received wages from an employer he or she does not know, Morrisey added.
He said anyone who receives a letter from the IRS indicating potential impersonation should immediately call the agency’s Identity Protection Specialized Unit at 1-800-908-4490.
Consumers who believe they may be the victim of tax-related identity theft should contact the Attorney General’s Consumer Protection Office at 1-800-368-8808 or visit the office online at www.wvago.gov.