The 35-day partial shutdown of the US government ended just time to allow the Internal Revenue Service (IRS) to open tax filing season. However, US expats will have to wait to submit their returns and get a refund.
During the longest shutdown in the history of the US, the IRS had to prioritise which tasks it would complete during the shutdown and with a skeleton staff one of the jobs left behind was compiling the yearly average exchange rates. Taxpayers who are paid in foreign currency need this to be able to file their returns, since the IRS only works with dollars.
If the IRS did not post the exchange rates for 2018, many expatriates would need to ask for a six-month extension to file their taxes, said Kevin Thorn, a Washington-based lawyer specialising in tax litigation. As of yesterday, the list has been updated.
Despite the handicap, IRS commissioner Charles Rettig said the agency will begin sending out refunds next week, Bloomberg reports.
American citizens or resident aliens living overseas are required to pay US income taxes, although they can qualify for tax credits or deductions based on the levies they pay in the country where they reside. However, this may soon change.
The shutdown cost about $11bn and shaved 0.2% off the nation's annual economic growth forecasts, the non-partisan Congressional Budget Office said. It was triggered by a fight over funding for Donald Trump's proposed border wall with Mexico.