Tax day — April 18 — fast approaching

The headline to this story seems to be a misprint but it's not. The traditional deadline to file federal and state income tax returns is April 15, but because of 2023 calendar quirks, Tax Day is pushed back to Tuesday, April 18.

Here's the explanation and it is a little convoluted.

This year, April 15 fell on a Saturday, when government offices were closed. Normally, the deadline would have simply adjusted to Monday, April 17, as it has in some past years. So far, so good.

However, April 16, a Sunday, was Washington, D.C.'s Emancipation Day, which pushed commemoration forward to Monday.

Since Internal Revenue Service is headquartered in the nation's capital, Monday became a day off for IRS, which processes federal tax returns.

Ergo, 11:59 p.m. Tuesday, April 18, is the 2023 deadline for the filing of federal and state of Missouri returns.

There is yet one more potential monkey wrench for filers.

A taxpayer can file IRS Form 4868, an automatic six-month extension of time to file, making meeting the April 18 deadline effectively moot — but with an important caveat.

Lynette Halter

Lynette Halter

"The extension is only for filing the paperwork; it's not an extension to pay what is owed," said Lynette Halter, who oversees H&R Block's tax preparation offices in Jackson and Marble Hill, Missouri.

Data points

• According to the website CNET, tax changes in 2023 have led to slightly smaller refunds than in 2022; the average tax refund is approximately $2,910, down about 11% for early tax filers. IRS began accepting online returns Jan. 23.
• Lower refund amounts, according to CBS News' MoneyWatch, is because of expiration of pandemic tax credits and certain other benefits, ranging from the expanded Child Tax Credit to three rounds of federal stimulus checks.
• IRS, despite the lower average refund amounts, is issuing more refunds so far this year — about 1.5 million more, up 2.6% from 2022 to-date, according to USA Today.
• "We believe individuals are filing their returns sooner this year to get refunds faster given the tougher economic environment," according to a Bank of America report.

The Southeast Missourian asked Halter, who is an enrolled agent of IRS, what last-minute items taxpayers should note before filing.

The Inflation Reduction Act, passed by Congress, added new appropriations for the hiring of IRS agents. Should taxpayers expect IRS to be watching returns more closely this year?

Yes, they're going to look at more returns and will do more paper audits — meaning the government will ask taxpayers to provide more information before processing a return to make sure they qualify for certain credits, for example.

What are deductions that people miss out on, typically?

They may qualify for credits they don't know about and so they end up paying a higher tax. For example, for a single person, if income is below a certain threshold, they're eligible for an earned income credit (EIC) but some don't know the credit exists. Also, education credits don't get claimed sometimes, The 1098-T form may not come from a college or university in the U.S. mail these days. (Southeast Missouri State University), for example, puts the form online but if you don't know to look in the website portal, you don't realize you qualify.

What are deductions taxpayers try to claim for which they're not eligible?

Trying to take a child tax credit when the child doesn't live in the household, for one example. Some try to claim the credit for their grandkids when the credit really accrues to the parents.

IRS says the lion's share of tax filings — whether from businesses or individuals — are online. Does that track with H&R Block's experience?

For us, it's more like 95% who file electronically. We have very few people who file via U.S. mail. It's a lot of paperwork to put into an envelope to do it in the old way.

With the deadline right on top of us now, what advice would you give to a late filer who isn't planning to seek an extension?

Get your paperwork in immediately just in case you're missing something so that we have time to get it before the deadline.

Of note

Halter said between her two H&R Block-managed offices, her staff handles about 1,200 returns annually.

An enrolled agent is the highest credential awarded by IRS and an EA can represent taxpayers before Internal Revenue officials for issues including audits, collections and appeals. Halter has been an enrolled agent since 1998.

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