The mad dash for April 15 is especially crowded with procrastinating taxpayers this year.
More Americans than usual have waited until the last two weeks to send their tax returns to the Internal Revenue Service. The latest IRS data showed 4.5 million more taxpayers were waiting to file as of March 22 than was the case on that day last year. Plus, the IRS expects about 2 million more returns this year than last.
“Everybody’s got to file eventually,” said Mark Steber, chief tax officer for Jackson Hewitt Tax Service Inc. “This year’s like no year we’ve ever seen.”
You can blame the tax season’s delayed start for this year’s filer-packed finish. Congress rewrote so many tax laws at the last minute — to avoid the “fiscal cliff” — the IRS was forced to start accepting tax returns two weeks later than normal.
Some 80 million taxpayers had filed as of March 22. While that’s the majority, that’s down 5.2 percent from the same time a year earlier, the IRS said. For those who haven’t filed, nearly every tax adviser has the same advice: File. No matter what.
“We have two weeks left. By all means, use your time to get organized whether you’re a do-it-yourselfer or you go into a tax office,” said Jackie Perlman, principal tax research analyst for the Tax Institute at H&R Block.
File, because you’re probably owed a refund. About 3 out of every 4 filers are. This year, the average refund at this stage is $2,827, down 1.2 percent from this time a year ago.
Refunds seem to be running later than usual too, said Bret Willoughby of Tax911.com Inc. in Olathe, Kan. The company specializes in taxes for Americans living overseas.
Mr. Willoughby said that a few years ago, clients got their refunds less than a week after filing electronically. Refunds do take longer, acknowledged Michael Devine, an IRS spokesman in St. Louis. Those checks have to pass through a number of tests before heading out the door. “We’re being more careful to catch tax fraud,” he said.
The promise at IRS is 21 days for your refund.
File, experts say, even if you don’t have all the papers you need from others. For example, some mutual funds and other investment firms have been late sending out 1099 forms that taxpayers need to report gains. “With a phone call, you may not get the document but you can get the amount,” said Mr. Steber at Jackson Hewitt.
File even if you owe money but can’t pay all you owe, tax professionals say. The IRS penalties for failing to file are 10 times bigger than the penalties for paying too little.
Skip the April 15 deadline and Uncle Sam adds 5 percent to your unpaid tax amount every month you are late. Pay too little, and the underpayment penalty is 0.5 percent each month until you make up the shortfall.
Besides, the IRS will let you work out a payment plan for financial hardship cases. Use the online payment agreement at IRS.gov or include IRS Form 9465-FS, “Installment Agreement Request.”