A Missouri Revenue Department spokeswoman said Friday the department will consider delaying interest charges on a case-by-case basis.
Monday is the deadline for Missourians to file state and federal income tax returns and, under the law, people who don't pay their taxes by Monday owe a penalty in addition to the tax bill.
But some lawmakers in both parties have urged colleagues to pass a bill allowing taxpayers a grace period on those interest charges — because they remain concerned people aren't prepared for the surprise tax bill they may have to pay.
On its website, dor.mo.gov/WebsiteLetter.pdf, the department said the state is "following the Internal Revenue Service's lead and will not impose penalties for underpayment of estimated tax, provided that the taxpayer has paid at least 80 percent of the tax owed by April 15, 2019. The standard threshold is 90 percent."
Chuck Pierce, a CPA who represents the Missouri Society of Certified Public Accountants at the Legislature, told the News Tribune last week that stories of people facing higher-than-usual tax bills largely are anecdotal.
"Obviously, there were a lot of (tax law) changes this year, and they really impact taxpayers differently based on their different circumstances," he said. "It's almost impossible to generalize."
One of the reported issues has been people who expected larger refunds, as they've received in the past — and who count on those refunds to help pay bills this time of year.
In 2017, Congress reduced the tax obligations for many Americans, effective Jan. 1, 2018, while also increasing the standard deduction for those taxpayers.
The combination, Pierce said, made the withholding tables "more closely approximate their tax liability," reducing the likely refund.
"That may not be what they're used to," Pierce said, "and that certainly could cause some surprises."
People who itemized deductions in previous years may not be able to do so this year, he said, also reducing the amount of refund that might be available.
Last week, the House endorsed the idea of delaying the imposition of interest payments for taxpayers facing a larger-than-usual bill.
But Senate leaders told reporters Thursday that kind of law isn't necessary — because the Revenue Department "already has the ability to do it," Majority Leader Caleb Rowden, R-Columbia, said.
"They have the ability to do all of that already — so, I think they should absolutely do it because I have been, and continue to be, critical of how the Department of Revenue handled much of that situation."
At the same time, Senate President Pro Tem Dave Schatz, R-Sullivan, added: "Some people might take advantage of that, knowing that there's not going to be any penalties."
Revenue's considering those situations on a case-by-case basis should prevent procrastinators from taking advantage of the system, both men said.
Pierce said tax returns this year may be more complicated for people who "have things that affect their tax liability, other than wages," including "interest from dividends (and) other sources of income" like being part of a small business.
He noted each taxpayer's situation is different, but the public discussion may be more difficult because "a lot of people want to over-generalize, and say, 'This type of taxpayer is helped,' and 'This other type of taxpayer is hurt'" by the tax law changes.
Another complication for Missouri taxpayers is the tie between the state and federal returns — a lower federal tax obligation means less of a deduction in state taxes, which could result in a higher state tax bill, even if the taxpayer's total tax obligation is less.
People who want to have more money available as a refund should adjust their W-4 forms with their employer, Pierce said, noting the IRS "has just announced some new W-4 worksheets they're putting out."
Although the tax year for most people runs from Jan. 1 through Dec. 31, Pierce said, "This time of the year is when a lot of tax planning actually occurs.
"In a perfect world, it would occur before this, but a lot of people really don't think about their taxes until they sit down with someone to have them done."
Then, he said, "If the result is not what they anticipated or what they want — then the tax professional, the CPA, can advise them of some things they can do, such as changing their W-4, have additional amounts withheld or maybe make quarterly estimated payments in addition to their withholding, to get closer to their balance due."
After all, he said, the real goal of withholding, and of tax planning, isn't to have a big refund when tax returns are due, but "to be as close as possible on April 15 to your actual tax liability."