Trump’s Executive Orders Could Delay Your Tax Refund This Year: Here’s What You Can Do
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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President Donald Trump has issued a slew of executive orders (EO) since beginning his second term, including one that may have an impact on your tax refund. One of Trump’s EOs initiated a hiring freeze at the IRS on new jobs and rescinded any job offers for IRS employees who would have started after Feb. 8.
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At the same time, another EO demanded all federal employees who had been working from home would have to return to the office. Nina Olson, executive director of the nonprofit Center for Taxpayer Rights, wrote in an email to the Journal of Accountancy this this might force the early retirement of IRS employees of retirement age, not only because commuting might add undue burdens, but because it could allow them to “lock in their retirement benefits.”
A wave of early retirements could leave some key IRS positions unfilled, which could significantly affect the IRS’ ability to process tax refunds in a timely manner.
While other federal departments may have their freezes lifted after submitting reports justifying their needs, the IRS’ freeze can only be lifted when the recently confirmed Treasury Secretary, Scott Bessent, decides it is the right time.
While there isn’t much Americans can do at the moment to change the speed of their refunds other than filing early and accurately in hopes of getting your refund early, according to Christopher Stroup, CFP and owner of Silicon Beach Financial, there are some moves you can make this year that will put you in a better position for next year’s tax refund.
Adjust Your Withholding Allowances
Getting a big tax refund generally means you overpaid in taxes. One way to avoid overpaying taxes throughout the year is by adjusting your withholding allowances, Stroup said.
“I often encourage folks to use the IRS withholding calculator to determine the right amount to have deducted from their paycheck. This can help ensure that you’re not overpaying and waiting for a refund come tax filing season.”
Increase Your Retirement Contributions
Contributing more to your retirement accounts, such as a 401(k) or IRA, can lower your taxable income, as well, and help you grow money for your own future. “By reducing your overall tax burden, you’re less likely to rely on a refund to balance your finances,” Stroup said.
Consider Quarterly Estimated Payments
If you’re self-employed or have side gigs, paying estimated taxes quarterly can help you avoid a large tax bill at the end of the year, Stroup said. By calculating and paying regularly, you can also prevent the cycle of overpayment, which can lead to large refunds.
“Remember, a large refund essentially means that you gave the government a 0% interest rate loan, which isn’t necessarily a great financial maneuver.”
Track and Deduct Your Business Expenses
If you’re a gig worker or freelancer, it’s essential to track your business expenses carefully, Stroup urged. By claiming any allowable deductions, you can reduce your taxable income and avoid paying more than necessary. “This helps to ensure that you’re paying only what you owe and are not waiting for a refund to fill any financial gaps,” Stroup said.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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