Tax filing extension deadline ends today, Oct. 17. Why did so many people ask to postpone tax returns?
Time has run out for Americans that haven’t filed a tax return yet. A record number of taxpayers filed for the six-month extension which expires 17 October.
While the official tax filing day for 2021 tax returns is long past, it was back on 18 April, a record number of Americans filed for a six-month extension. The generous leeway is now set to expire 17 October, usually its on the 15th but that date fell on a Saturday.
Generally around nine to ten million taxpayers file for the extension but over the course of the pandemic those numbers ballooned. In 2022 the Internal Revenue Service received around 19 million petitions for the six-month extension.
Why did so many people ask to postpone tax returns in 2022?
Every year there are Americans that procrastinate pulling together their paperwork and sitting down to crunch the numbers for their tax filing. Call it human nature. The IRS allows people to file a Form 4868 to request the automatic six-month extension.
While the extension gives taxpayers more time to get their house in order, it doesn’t relieve filers of the need to pay any taxes owed by the Tax Day filing date. Taxpayers should pay the amount that they owe, or as much of what they think they owe, to avoid penalties and interest on the outstanding debt to Uncle Sam.
The outsized number of Americans requesting a six-month extension in 2022 could be the result of several factors. They may have thought that the IRS would once again push back the official filing date as they did for the 2020 and 2021 filing season due to the covid-19 pandemic.
Possibly they were waiting for any last-minute changes that might have come out of Congress to help alleviate hardships still being experienced. One thing is for sure, calculating the child tax credit and/or the recovery rebate credit made crunching the numbers harder for many filers.
Delaying any longer will cause more of a headache
Taxpayers that are hearing the clock ticking down won’t want to dilly dally but at the same time take care when preparing their 2021 tax return. Mark Steber, chief tax information officer at Jackson Hewitt Tax Service, told USA Today: “If you filed an extension and you don’t file your return, your penalty and interest calculations are grandfathered back to the original April 18 due date.”
You should have all the documents necessary in your possession by this time including your W2 from your employer or any 1099s as well as K-1s.
If you were expecting a refund you will want to double check your numbers because any information that doesn’t match what is on the IRS systems or is missing will trigger a delay in the tax agency processing your filing. Just as the pandemic disrupted normal operations for businesses around the world, the IRS was no different which created an enormous backlog.