Price of Procrastination: Late Filers Pay More to Get Taxes Done

Survey: Late Tax Filers Pay More to Uncle Sam On the fun meter, having your taxes done ranks up there, with say, getting a root canal or cleaning your bathroom -- so it comes as little surprise that many people procrastinate about filing their returns.

But there's a price to pay for putting off your date with the IRS, according to a new tax preparation survey by TechBargains.com: Procrastinators, defined as taxpayers who file in April as well as those who apply for extensions and file even later, tend to pay an average of $163 to get the job done, while early birds who file in January and February pay about $87.

Disorganized late filers often end up paying more to their tax preparers because of the extra time it takes.

"It may take us more time to prepare the extended return -- it could be more complicated or the records could be in bad shape," Mary Kay A. Foss, a C.P.A in Danville, Calif., tells DailyFinance. "Since our bills are related to the amount of time we must spend, the bills are often higher than the ones filed earlier in the tax season. So not only are they unhappy because they may have missed a deduction, they think that they're paying more for the return as well."

What's more, late filers are often disorganized -- which can lead to missed deductions, Foss says. "Paying taxes can be very stressful -- especially if [taxpayers] haven't prepaid enough tax or if your records are in disarray. I find that people who wait until the last minute always feel that there are other deductions that they may have missed because they didn't have enough time to do the best job in gathering information."
Sponsored Links
Now, while Foss notes that later filers also end up paying more in taxes, it's not so much that filing late causes taxpayers to pay more -- it's that late filers are generally the ones who owe more to Uncle Sam in the first place.

"I wouldn't say that filing late causes you to lose money," Foss says. "The early filers are those expecting refunds or needing the return to apply for financial aid for a college-age child. Those that file in April may have determined earlier that they owe a lot of money and don't want to part with it until the last minute."

The survey also found that 89% of early filers feel positive about their tax preparation method, whereas 62% of procrastinators don't feel good about how they've filed their taxes.

"If you are getting a refund, owe very little tax or need the return early for the college forms, having everything done on time or early is a very good feeling," Foss says. "These people know they've accomplished an onerous task early enough that they can enjoy the springtime, spring break or the Final Four games. They're happy the returns are done and pay our bills quickly."

By contrast, "clients who file at the last minute often tell me, 'I'll be better next year, I'll be organized and we won't need an extension,'" Foss says. "It is rare that they change their behavior the next year."


2012 Tax Prep Infographic
[Via: TechBargains]

Should I Include a Dependent's Income on My Tax Return?

It may be easier and less expensive to include dependents' income on your tax return rather than have them file their own return—in certain circumstances.

Read More

Brought to you by TurboTax.com

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as an itemized deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

Read More

Brought to you by TurboTax.com

Tax Tips After January 1, 2019

TurboTax gives you ten tax saving tips for the new year. Find strategies to lower taxes, save money when preparing your tax return, and avoid tax penalties.

Read More

Brought to you by TurboTax.com

Should You and Your Spouse File Taxes Jointly or Separately?

Married couples have the option to file jointly or separately on their federal income tax returns. The IRS strongly encourages most couples to file joint tax returns by extending several tax breaks to those who file together. In the vast majority of cases, it's best for married couples to file jointly, but there may be a few instances when it's better to submit separate returns.

Read More

Brought to you by TurboTax.com
Read Full Story