Between the possibility of another federal government shutdown and the official implementation of the most significant tax reforms since the Ronald Reagan administration, this year’s tax season is gearing up to be a year of questions.
Medina Certified Public Accountant James Coco, 58, said the first official day for tax season was Monday, and he had customers waiting outside his business at 60 Public Square.
“So far, I have transmitted about two dozen returns already,” Coco said Thursday.
Officially known as the Tax Cuts and Jobs Act of 2017, the new tax law includes some 600 modifications to the federal tax law, and was designed to simplify the income tax filing process.
Changes to the law include an increase of standard deductions for single taxpayers from $6,350 to $12,000, while married couples will see their standard deductions increase from $12,700 to $24,000. The law also increases the Child Tax Credit and adjusts the seven income tax brackets as well as their financial thresholds.
Coco said when a federal income tax return is filed electronically, the filer receives an acknowledgement of acceptance or rejection from the IRS.
“At this point I have had all acceptances, there was one rejection which was easily fixed, so their processing time on an IRS acknowledgment with either acceptance or rejection has been very quick, sometimes within minutes,” Coco said.
Coco said he does not believe the looming threat of another federal government shutdown is having a significant effect on when individuals choose to file their income taxes.
“The IRS is saying it is business as usual,” he said.
Jackson Hewitt Tax Service said in a press release this week that the company is encouraging individuals to file their income taxes by Feb. 15. This is the last guaranteed day the government will remain open after temporarily reopening following a 35-day partial government shutdown.
“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.
Steber said taxpayers who may be feeling uncertain about the income tax returns this year are not alone.
Brunswick Certified Public Accountant Daniel Ferencz concurred with Coco as far as smooth sailing regarding the e-file process since Jan. 28.
Ferencz said he typically completes between five and 10 1040 forms by the end of January, and he is on track for that.
As far as learning about the changes as a result of the Tax Cuts and Jobs Act, Ferencz said CPAs complete 40 hours of classroom instruction annually, which will address changes in the tax law.
Coco said citizens that would like to learn more about the law can read an overview at irs.gov. While the entire law has been published by Congress, Coco said it could be too detailed for the average taxpayer, and he recommends citizens begin with the broad strokes before looking into all of the details.
As far as preparedness, Coco said it is good for people to begin gathering up their tax documents in a folder before making an appointment, and they can even begin collecting information such as donation receipts for next tax season.