A third of Americans file taxes at the last minute. Why that could be a bad idea
The deadline for filing taxes for 2020 on May 17th is approaching.
If you haven’t already filed your taxes, it’s time to start.
According to a recent poll by IPX 1031, 33% of Americans are reluctant to pay their taxes and wait until the last minute. The reasons why taxpayers postpone this vary – 40% say filing is too time consuming, 22% said it is stressful, and another 22% want to make sure they are filing correctly.
Others are just in no rush – 10% of respondents said they are in no rush to submit documents because they are not getting a refund. Six percent fear that they owe money.
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This year, many taxpayers postponed filing because the IRS moved the individual return deadline from April 15 to May 17, which gives most Americans an extra month.
“It’s almost May now and you don’t have that much time,” said Ed Slott, CPA and Founder of Ed Slott & Co. “Never wait.”
The IRS says it had received nearly 111 million 2020 returns and processed more than 100 million as of April 16. To date, the IRS has sent more than 73 million refunds averaging $ 2,873.
Major tax changes this year
Filing taxes is especially important this year.
This is the only way to get any refunds owed, stimulus checks you were eligible to but weren’t given, and 2020 tax breaks such as earned income and child tax credits, to name a few. Submitting your details to the IRS as soon as possible can also help protect yourself against tax fraud.
It is also important to submit for the coming year. Families with children who are eligible for the new extended child tax credit will need to file a 2020 return to receive payments due to start in July. Filing is also a way to easily update your direct deposit information and address in case further help is sent to families.
Those who have not yet submitted should submit their information electronically as this is also the fastest way to process a return and receive a refund. According to the IRS, it takes longer for the agency to process paper returns and all tax filing correspondence.
Many can file their federal taxes for free. If your 2020 gross adjusted income was less than $ 72.00, you can use the IRS Free File program. Those who have earned more than $ 72,000 can also file for free using the fillable IRS forms, but must prepare their taxes without electronic assistance.
Deadlines are especially important when you owe something
The filing deadline is most important to those who may owe the IRS money. When you owe a refund, the deadline is less of a concern if you’re not anxious to get your money back, according to Adam Markowitz, a registered agent at Howard L. Markowitz PA CPA in Leesburg, Florida.
Taxpayers owed a refund can claim it up to three years after the filing deadline by filing a tax return with the IRS for that year.
While filing is the fastest way to get your refund, the IRS has experienced delays in processing and sending money this year. Generally, tax refunds are issued within 21 days. However, this year the review may take additional time, according to the agency.
If you owe the tax officer, it is important that you meet the filing deadline to avoid paying penalties and late fees. Even if you request a six month extension, the IRS’s deadline for paying is still May 17th.
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