Trump's budget may delay future tax refunds
President Donald Trump’s new budget might subject your tax refund to another level of scrutiny before you receive it.
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The president released his budget Monday for the 2019 fiscal year, proposing a $11.1 billion for the Internal Revenue Service, including $2.3 billion for tax filing and compliance applications and $110 million to modernize the agency’s computer systems.
Trump’s budget also includes a handful of proposals to strengthen its enforcement efforts, which may place an obstacle between you and your tax refund in future years.
For instance, the IRS would have the authority to “correct more errors on tax returns before refunds are issued,” according to budget language.
How exactly the agency will scrutinize filers’ returns isn’t detailed in the budget, but the White House said this move “would keep refunds from being issued to taxpayers who are not eligible.”
This proposed change would reduce the federal deficit by $305 million between 2019 and 2023, according to the budget proposal.
The White House has also proposed requiring a valid Social Security number in order for filers to claim the child tax credit and earned income tax credit.
The child tax credit is now $2,000 per qualifying child, double the amount under the old framework. It begins to phase out for taxpayers who are married and filing jointly with adjusted gross income of $400,000 ($200,000 for singles).
Meanwhile, the amount of earned income tax credit a filer can claim depends on that person’s earned and adjusted gross income, as well as the number of qualifying children in a given household.
For the 2018 tax year, the maximum amount of credit a family can claim for three or more qualifying children is $6,444. That number is as low as $520 for filers with no kids.
Certain workers aren’t eligible for Social Security numbers, but may use individual taxpayer identification numbers in order to file their tax returns. Those filers include U.S. resident aliens, among others.
Finally, the budget called for the IRS to sharpen its oversight of paid tax preparers.
“Ensuring that these preparers understand the tax code would help taxpayers get higher quality service and prevent unscrupuluous tax preparers from exploiting the system and vulnerable taxpayers,” the White House said in its budget.
The president’s proposal is subject to approval by Congress and is likely to be modified by legislators.
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