As we settle into the second week of 2019 all eyes are on the government shutdown – and there’s certainly no shortage of questions about what’s going on or what’s going to happen. To help get these questions answered, we’re taking a closer look at what you need to know about the shutdown, what to expect for filing your 2018 tax returns, plus the IRS announcement for the start of the tax season.
The IRS is Not Totally Closed
The IRS was one of the federal agencies that didn’t have a funded budget to operate for the 2019 fiscal year. In fact, the funding the IRS had expired as of December 21, 2018.
However, the IRS has since remained open under a contingency plan, which includes operating with only 12% of its staff and the ability to accept electronically-filed tax returns (once that functionality is updated for the new filing year – more on that below) and some tax returns filed via mail.
When will The IRS Begin Accepting Tax Returns for the 2018 Tax Year?
The IRS generally begins accepting electronically-filed tax returns in late January, after a short period of time (generally from late November to early January) where systems are updated and forms finalized. On January 7, 2019, the IRS stated that they will begin accepting 2018 tax returns on Monday, January 28, 2019, and will issue refunds, despite prior statements to the contrary. It’s encouraging to hear that the agency also plans on bringing back a large portion of their furloughed workers in order to operate as normally as possible.
The IRS is still operating under a contingency plan, albeit an updated one that should be released within the coming days.
What Does This Mean for U.S. Expats Filing Returns?
As of right now, it’s expected for tax season to begin as normal with the ability to e-file beginning on January 28th – assuming the IRS is able to finish all system updates and the contingency plan ultimately provides for it. Tax software vendors must also finalize all system updates to their products as well, which could take a bit of additional time depending on how efficiently the IRS operates in the coming weeks.
At this point, expats should be gathering all their tax documents now and can begin the filing process with their tax advisors as they would in any other year. This is especially key as there have been sweeping changes to the tax rules this year due to the Tax Cuts and Jobs Act (TCJA) passed in December of 2017, many of which go into effect with your return for tax year 2018.
We’re staying close to these updates, so please check back for updates as further news and information becomes available.
Questions about Your U.S. Expat Taxes?
With so many changes to both the tax laws and the returns themselves this year, it is likely you may be left with questions specific to your situation or feel a bit apprehensive about starting your tax return. Set up a consultation with us or get a head start on preparing your tax return with us today and we’ll get you squared away!