This year’s burning tax questions, answered.
It’s almost that time of year again—time to file your taxes! Whether you put it off as long as possible or jump on it as soon as tax season starts, you know it has to get done. The article below details all the due dates and deadlines you need to know for your 2019 tax refund, along with answers to some important questions. Find out when you’ll get your refund, now!
WHEN ARE TAXES DUE FOR THE 2018 TAX YEAR?
If you’re an early tax filer, we’ll get to you in a second. But if you plan on submitting your taxes in the spring sometime before the due date, you should expect to do so by Monday, April 15, 2019.
The IRS hasn’t stated when they will start accepting returns in 2019 yet but based on previous years, you can anticipate tax return season to officially begin on January 29, 2019. That means you can file taxes beginning on that date.
WHEN TO EXPECT A TAX REFUND IN 2019?
The big question on our minds is, “When will I get my money?”.
The fastest way to get your tax refund is to have it electronically deposited into your financial account. This is a free service.
Well, most taxpayers get their tax refunds in less than 21 days from the date the IRS received and approved their tax filing. The IRS actually doesn’t put out a calendar but rather states most people should be getting their refund within that 21 days. They also say that even if people use tax-filing software programs before tax season, filers shouldn’t eFile until the IRS has opened the tax system.
So the bottom line is that is will take about three weeks from the time your taxes have been filed. However, there are some exceptions.
WILL 2018 TAX REFUNDS MAY BE DELAYED IN 2019?
Congress passed a new law that requires the IRS to hold onto tax refunds including the Additional Child Tax Credit (ACTC) and the Earned Income Tax Credit (EITC). The IRS will hold these tax returns until February 15, 2019.And it doesn’t matter how early you filed your return, if this is your situation, the IRS cannot release your refund until at least February 15. Last tax season, the IRS said they would start issuing these refunds on February 27, so it’s probably safe to assume those refunds will be slightly delayed again.
Why this weird law? What’s the point?
The goal of this is to lessen the prevalence of fraud. The extended hold gives the IRS time to carefully review each of these returns.
2017 and 2018 experienced many credit attacks on large institutions. We found the best way to ensure that your credit is safe, is to monitor it early and often. You can check your credit for free, and as often as you want without penalty using Credit Sesame.
WHERE’S MY REFUND?
After you file taxes, you can track your refund by using the IRS’s Where’s My Refund? tool. This tells you what stage your refund is on and when you can expect to receive it. This way, you won’t have to be in the dark about when you’re money will arrive.
Again, the fasted way to get your tax refund if to file electronically (IRS eFile) and have the funds deposited directly into your bank account. This IRS program is called direct deposit. Interestingly, You can use it to deposit your refund up to three different accounts.
Direct deposit returns are common. About eight out of ten taxpayers get their refunds through direct deposit. It is fast and safe. Then direct deposit and e-Filing is combined, the IRS issues more than nine out of ten refunds in less than 21 days.
Does This Apply To State Tax Refund?
All of this stuff about timeframes and new law – it doesn’t apply to your state tax refund. So far, we’ve only talked about federal tax refunds.
Typically, your state tax refund can take up to 30 days to get back to you if you file electronically. But if you file a paper tax return, it can take up to 12 weeks (three months!) for your refund to arrive – that’s not surprising knowing how snail mail works.
If you’re wondering where your state tax refund is, you can either contact your state tax agency or check the Department of Revenue’s website for your state.
HOW WILL THE TAX REFORM BILL AFFECT YOUR TAX REFUND IN 2019?
Back in December 2017, the government signed in new legislation that may affect the taxes you file in 2019 (2018 tax year). This new legislation could lower taxes for small business and individuals.
Here’s a quick highlight on what this tax reform will do for taxpayers:
– Lower tax rates for individuals
– Higher standard deduction
– Higher child tax credit
– No more dependent and personal exemptions allowed
– Some itemized deductions
– $10,000 limit on deductions for state income, sales, local, and property taxes combined
And there are more. But let’s take a look at the common situations that will be affected. This isn’t an exhaustive or comprehensive list of changes, just the highlights – things that may affect you.
FAMILY WITH CHILDREN
A family with kids may see bigger refunds in 2019 – the child tax credit was doubled from previous years from $1,000 to $2,000. There’s also a non-refundable credit of $500 for each dependant that is not your child.
And these benefits have in the past phases out for families with an annual income of $110,000 or more. Now, that threshold is $400,000.
STANDARD DEDUCTION INCREASE
Individual taxpayers will get a larger standard deduction in 2019 – it’s going from $6,350 to $12,000. The standard deduction for married couples who file jointly will go from $12,700 to $24,000.
ITEMIZED DEDUCTIONS AND LOWER TAX LIABILITY
If you have itemized deductions on your return, you’ll probably see fewer deductions, which in turn lower your tax liability (tax debt owed by an individual). This is especially true if you live in a state with high property taxes.
INVESTMENT EXPENSES
If you have investment accounts, you will no longer be able to deduct the fees associated with those accounts.
Before this new tax reform, you were allowed to deduct fees from custodial or investment accounts (trust admin fees, investment management fees, etc.) if they exceeded two percent of your Adjusted Gross Income. Now, those can no longer be listed as deductions.
So if your IRA is quickly growing and you want to have it for the long-run, you may want to think about paying the fees out-of-pocket. Doing this means the money in your IRA will keep growing and still be tax-deferred.
DONATIONS AND CHARITY
If you are a generous person and list your donations to charity on your tax return, listen up. If your giving is less than the standard deduction, you could think about making 50-100% more donations in 2018 to surpass the deduction threshold. Then you can itemize those donations and increase your refund amount.
Obviously, not everyone can afford this. But if you can, it may be a smart move.
LOWER TAX LIABILITY FOR THE SELF-EMPLOYED, S CORPS, AND PARTNERSHIPS
If you’re self-employed or have a partnership or S-Corp, you may have a lower tax liability this tax season. This could lead to a bigger refund for you because the tax reform allows for a 20% business income deduction for those who qualify. It also nearly doubles the amount that a small business can list as an expense for business equipment.
FORM W-4
Because of the tax reform legislation, you’ll need to file a new Form W-4 with your employer if your life situation changes or if you get a new job. Your employer will most likely be aware of these changes too and should be alerting you of any necessary steps on your part. Also, you should definitely check with your tax advisor, or the IRS website, if you still have questions.
IRS REFUND SCHEDULE IN 2019 (TAX YEAR, 2018)
Here are the 2019 IRS refund schedule estimates (2018 Tax Year) by the date your return was accepted and refund method. Estimated dates based on previous tax refund schedules released by the IRS. Typically, e-filers, combined with direct deposit, get their refund the fastest.
Note: Estimated dates based on previous tax refund schedules released by the IRS. Due to auditing processes, the IRS no longer publishes tax refund schedule charts. Refunds may be delayed this year.
After you file taxes, you can track your refund by using the IRS’s Where’s My Refund? tool. This tells you what stage your refund is on and when you can expect to receive it. This way, you won’t have to be in the dark about when you’re money will arrive.
Again, the fasted way to get your tax refund if to file electronically (IRS eFile) and have the funds deposited directly into your bank account. This IRS program is called direct deposit. Interestingly, You can use it to deposit your refund up to three different accounts.
Direct deposit returns are common. About eight out of ten taxpayers get their refunds through direct deposit. It is fast and safe. Then direct deposit and e-Filing is combined, the IRS issues more than nine out of ten refunds in less than 21 days.
