Taxpayers Have ‘Lack of Urgency’ To File by April 18 — Is an Extension Right for You?
U.S. taxpayers will get an extra three days to file their returns in 2023 vs. most years, and it seems that many are taking advantage of it. The number of returns the IRS has received is down slightly from a year ago, and at least one tax expert senses a lack of urgency to file this year.
The total number of returns received by the IRS as of March 24, 2023, was down 0.8% from the previous year, according to the agency’s latest data. Total e-file returns were 0.3% lower, while e-file returns from those preparing their own taxes were down 2.7%. Those numbers have reversed the trend from a month earlier, when the number of returns rose 1.3% through Feb. 24.
The recent lag is partly due to the fact that the filing deadline this tax season is Tuesday, April 18, 2023. The traditional filing deadline of April 15 falls on a Saturday, and Washington, D.C., celebrates Emancipation Day on Monday, April 17.
With less than two weeks left to file, some tax experts wonder whether too many taxpayers are dragging their feet.
“There just seems to be a lack of urgency this year,” Kathy Brown, founder of Kentucky-based tax and accounting firm The Kat Company, told Fox Business. “I have never seen such as easygoing, no rush, file an extension attitude as I have seen this year.”
One reason for the lack of urgency is that tax refunds are smaller than last year’s. According to the IRS, the average refund amount through March 24 was $2,903, down 11% from $3,263 a year earlier.
“There’s no bucket of cash sitting on the table from the federal government,” Brown said.
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On the bright side, the IRS is processing returns and refunds faster than in 2022. As of March 24, it processed 1.9% more returns compared with the same time last year and issued 2.6% more refunds.
For taxpayers who find themselves panicking that they won’t be ready to file returns by April 18, there is always the option of filing an extension. This is an especially good option if you have a complicated return.
If you choose the extension route, keep in mind that you only get an extension on filing the return — not paying what you owe. The IRS will charge interest on any unpaid balance after April 18. If you do owe taxes, Brown recommends paying part or all of your estimated tax bill to minimize penalties and interest.
One thing you shouldn’t do is rush your return to meet the April 18 deadline. Tom O’Saben, director of tax content and government relations at the National Association of Tax Preparers (NATP), told Fox Business that some documents might still be coming in, such as corrected brokerage statements.
Rushing your return could also lead to costly tax mistakes, such as overlooking deductions and benefits, incorrectly claiming dependents, or forgetting to report income from various side gigs.
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