TAXES DUE: Returns Deadline Looms
(CNNMoney) — You’ve had months to procrastinate, but now it’s crunch time.
Despite delays to the kick-off of tax season, Monday, April 15 is still the deadline to get your taxes to Uncle Sam.
If you’ve already filed your taxes, you’re one of at least 97 million taxpayers who have submitted returns to the IRS, according to filing statistics as of the first week of April. The majority, or about 90%, of returns submitted so far have been filed electronically, and the average refund is $2,755, about $40 less than the average refund during the same period last year.
And some taxpayers could have even more money coming to them. The IRS announced earlier that it has $917 million in unclaimed 2009 refunds, meaning those who didn’t file a tax return for 2009 should do so — but they better act fast because the window of opportunity also ends Monday.
It typically takes three weeks or less to receive a refund if you file electronically, and you can check the status of your refund on the IRS website. But you can expect a much longer wait for your refund if you become a victim of identity theft.
“It’s unfortunate … but the IRS has to make sure they have the correct taxpayer and are protecting the correct taxpayer and protecting themselves,” said Edward Karl, vice president of taxation at the American Institute of CPAs.
Identity theft is a growing problem for the IRS. If you receive a notice from the IRS that more than one tax return has been filed in your name it’s often an indication that this has happened to you.
Your tax season will also be prolonged if you are targeted for an audit. To avoid raising red flags, don’t do things like round to the nearest thousand, exaggerate charitable donations or inflate deductions.
Deducting questionable items is also risky. Some of the weirdest deductions tax preparers have seen recently are used underwear, medical bills for pets and bail money to get out of jail after a bar fight. While none of these were given the green light, other strange deductions like air conditioning expenses for a sweating problem, a nose job for a wine bar owner and sex toys for an exotic dancer were considered legit.
If you’re simply not ready to file, you can always file an extension using Form 4868, also due Monday.
“If [taxpayers] can’t [file] in time, It’s much better to do an extension and take a little bit more quiet time after April 15 to get it right,” said Karl. “Sometimes people panic a little bit and worry they’re going to be subject to more scrutiny, but extensions are normal.”
If you owe tax, you still need to pay at least 90% of the amount you owe at the time you file an extension. Otherwise, you will face penalties of 0.5% of tax owed for each month you’re late — up to 25% of the unpaid amount. Filing late (without submitting an extension) will result in a fine of 5% of unpaid tax per month, up to a maximum of 25% of unpaid taxes.
The filing season officially started Jan. 30 this year, eight days later than planned. And taxpayers claiming education credits had to wait until mid-February to file their taxes, while other forms couldn’t be submitted until March 4 as the IRS updated its processing systems.
While the majority of tax filers receive refunds, fewer people expect to get money back this year, according to an American Express survey. The number of people anticipating tax refunds dropped from 64% last year to 59% this year — likely a result of an improving economy and higher wages.
For those who do have refunds coming, 37% plan to use the extra cash to pay down debt or bills, 28% will spend it and 26% intend to save it.