The 2018 filing season for 2017 tax-year returns officially launched on January 27. On the other end of the filing season, taxpayers have two additional days to file their 2017 returns: the traditional April 15 filing deadline moves to April 17 this year. Some early filers, however, may find their refunds delayed if they are claiming the additional child tax credit (ACTC) and/or the earned income tax credit (EITC).
Unlike some past years, the IRS goes into the filing season without having to make too many changes to the Tax Code. The heavy haul will come this year, as the IRS implements the countless changes to the Tax Code in the Tax Cuts and Jobs Act. Former IRS Commissioner John Koskinen recently said that he worries the agency will have adequate resources – personnel and monetary – to push out the necessary guidance for the Tax Cuts and Jobs Act. “It’s a challenge,” Koskinen said.
Comment. The January 27 launch comes just a few days before the mandatory January 31 deadline for employers to file certain information returns. Forms W-2 and W-3, electronic and paper, are due to the Social Security Administration by January 31. Forms 1099-MISC, box 7 (for non-employee compensation) are due to IRS by January 31.
April 15 falls on a Sunday this year. As a result, the filing deadline moves to Monday, April 16. However, April 16 is a holiday – Emancipation Day – in the District of Columbia. This moves the filing deadline to Tuesday, April 17.
Comment. Legal holidays in the District of Columbia affect the filing deadline not only in the District of Columbia but across the nation.
Tax laws do not allow the IRS to issue immediate refunds to taxpayers claiming the ATC and/or EITC. The IRS predicted that refunds related to be the ACTC and/or EITC will be deposited in taxpayer accounts or on debit cards starting February 27, 2018, approximately one month after the launch of the filing season. Taxpayers will need to choose direct deposit, the IRS explained, to get refunds deposited as quickly as possible.
As in past years, the IRS predicts that nine out of 10 refunds will be issued in fewer than 21 days. The agency reminded taxpayers that many financial institutions do not process payments on weekends or holidays. This can result in further delays.
Comment. Presidents’ Day falls on Monday, February 19. Many financial institutions will be closed over the three-day weekend, a reason the IRS gives for the late date for some refunds when compared to last year.
The start of the filing season also brings an uptick in refund fraud. Criminals file fraudulent returns early in the filing season before taxpayers file their legitimate returns. The Treasury Inspector General for Tax Administration (TIGTA) recently cautioned taxpayers to be on “high alert” for identity theft and refund fraud.