Impending Tax Deadline and Lack of Urgency
Time is running out to file taxes, with the deadline less than a month away on Tuesday, April 18, adjusted from the traditional April 15 due to a Saturday and Washington, D.C.'s Emancipation Day on April 17. Taxpayers are not rushing to prepare returns, showing an unprecedented easygoing attitude toward extensions.
There just seems to be a lack of urgency this year... I have never seen such an easygoing, no rush, file an extension attitude as I have seen this year.
Factors Contributing to Delayed Filings
Tax experts attribute this complacency to the absence of federal stimulus money that previously compelled filings to claim direct payments. IRS data confirms total returns received through March 24 are down 0.8% year-over-year, while refunds issued rose 2.6% but averaged smaller at $2,903 versus $3,263 last year, reflecting expired COVID-19 relief like stimulus checks and enhanced child tax credits.
Ongoing document arrivals, such as corrected brokerage statements, further discourage rushing, according to professionals.
There’s no bucket of cash sitting on the table from the federal government.
Recommendations for Extensions and Payments
Submitting an incorrect return risks audits or amendments, so experts advise filing an extension if unprepared. Extensions extend filing time but not payment deadlines, with the IRS charging interest on unpaid balances post-Tax Day. Taxpayers owing money should pay estimated amounts to minimize penalties.
Extensions are always a good thing. If you’re going to owe, file an extension just to make sure you have all your income documented and reported.
Gig Workers and Self-Employment Challenges
Rising gig work contributes to delays, as a Upwork survey indicates 39% of Americans, or 60 million people, freelanced in 2022, up 3% from prior year. New self-employed individuals often lack withholding and saved receipts for deductions, treating them as contractors eligible for expense claims. Professionals suggest substantiating via credit card statements, bank records, or the Cohan rule for reconstructed expenses using indirect proof like schedules or playbills.
Assuming nothing was saved, perhaps a taxpayer could go from their appointment schedule and work backward to recreate mileage or check bank or credit card receipts for fuel purchases, etc.
They don’t know what they don’t know. We usually try to substantiate [expenses] with other things like a credit card or bank statement or canceled checks.
Role of Accounting Software
Accounting programs like FreshBooks simplify tax preparation by tracking income, categorizing expenses under tabs like travel or meals, and using mobile apps for automatic mileage logging to distinguish business from personal use. Such tools help gig workers and small businesses organize data, enabling collaboration with experts and avoiding overlooked deductions.
If you’re not using accounting software like FreshBooks to track your income and expenses, you’re likely leaving money on the table.
