While death and taxes may be two inevitabilities of life, some people like to push the envelope when it comes to the latter.
Procrastinators live among us, given that about 20 percent of taxpayers wait until the last two weeks of the tax season to file their returns. The majority of Americans tend to file early because of the anticipation of receiving their tax refund, said Lisa Greene-Lewis, CPA and tax expert at TurboTax. Others, however, may have complicated tax issues or late-arriving tax forms that delay their ability to file, while some might simply put it off because they are worried or confused about the process.
But issues such as higher preparation costs and even more delays may come hand-in-hand with putting off tax preparation until the last minute. Because the workload intensifies leading up to the filing deadline -- which is April 18 this year -- some certified public accountants will ask their procrastinating clients to file a tax extension. Consumers relying on tax software programs or online filing will face higher costs than if they had filed earlier in the season.
TurboTax, for instance, ended its early season pricing on its online filing products on March 17, which means that consumers will now pay as much as 25 percent more for the same products. The company still offers its federal free edition, which is geared for consumers filing either the relatively simple 1040EZ or 1040A forms, although TurboTax said that is subject to change. TurboTax's Deluxe edition now costs $54.99 for federal returns, for instance, instead of the $34.99 before March 17.
H&R Block, meanwhile, appears to have kept its online and software prices steady. Like TurboTax, it also offers a "free filing" option for simple tax returns. Still, many of those free filing options disappear later in the tax season, according to research from Oppenheimer & Co. cited by Bloomberg News. H&R Block didn't immediately return a request for comment.
As for taxpayers who rely on accountants, there's the danger that your CPA may not have time to handle your returns the closer you wait until April 18. It's not all that unusual to file for an extension, since about 8 percent of all returns the IRS receives are filed with the additional 6 months that the extension provides.
"As far as using an accountant, what I've seen, having worked for a CPA firm, they may (have) a deadline about when they want to see your tax documents because they get backed up," said Greene-Lewis. "They may have a cut off where they put you on an extension."
There are a few issues to be aware of with extensions, such as the fact that payments are still due on April 18. That means people filing extensions will need a reasonable estimate of what they owe the tax agency by the deadline.
"You should try to file as soon as possible," said Greene-Lewis, who noted that TurboTax users can file up to 11:59 p.m. on the night of the tax deadline. "People who rush at the last minute may leave something out or forget about tax deductions and credits, even though we do remind you. It's best to do everything earlier."