Investment bank UBS says that uncertainty around the new tax brackets could have resulted in some of the change over last year.
"Withholding tables for 2018 may have been adjusted incorrectly," the bank's economist Robert Martin said in a note to clients this week.
"As a result, nobody —notus,notothereconomists,nottheUSgovernment —knows whether refunds will be larger or smaller than in past years, as small changes in the assumptionsonanyofthethreefactorslead tolarge changes in net payments to households."
It's not just return size that's down, either. Every single cumulative metric tracked by the IRS is showing a negative percent change compared to last year. Total returns processed is down 25% while total returns received is down 12.4%.
The IRS assures that these are only early metrics and that operations are going smoothly despite the staff shortages right at the beginning of tax season due to the government shutdown.
"IRS systems are operating smoothly to start the filing season, and refunds are being issued," the agency said, according to Politico. “The IRS encourages taxpayers to e-file as the quickest way to receive their refunds."
That could all change come Friday, though, when funding runs out on February 15. As lawmakers work together to write a bipartisan border security proposal, a heavy cloud of uncertainty remains.
So, you decided to become your own boss (at least part-time) and start driving for a ride-sharing company like Lyft. Use the Lyft tax preparation checklist below to organize your income and deductions to make filing your taxes a breeze. Remember, not all items listed will apply to you, but it will give you a good idea on what you need to report as income and what you can claim as a deduction.
Originally created to make sure the wealthy paid taxes even after using tax breaks and loopholes, the Alternative Minimum Tax (AMT) has never been updated and continues to impact middle class Americans more and more each year as a result of inflation. To compensate for inflation, the AMT now includes an exemption amount. This exemption is indexed for inflation so it changes every year.
Taxpayers who upgrade their homes to make use of renewable energy may be eligible for a tax credit to offset some of the costs. As of the 2018 tax year, the federal government offers the Nonbusiness Energy Property Credit. The credits are good through 2019 and then are reduced each year through the end of 2021. Claim the credits by filing Form 5695 with your tax return.
Every April, many taxpayers wait until the last minute to file their federal income tax returns. Despite this tendency, there are many reasons to file your taxes early. If you will receive a refund, you may want to submit your return as quickly as possible. Additionally, there are benefits to filing early for those taxpayers who have a balance due.