Tax procrastination has a price

Columnist

The Internal Revenue Service has good news for some taxpayers.

First, if you didn’t file your tax return in 2009, you still have time — until April 15 — to claim any refund you might be due. The IRS estimates that half the potential refunds for 2009 are for more than $500. That’s not chump change in my book. It could be enough to help pay for the preventive maintenance you’re supposed to regularly get for your car.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.” View Archive

There is a three-year window from the original deadline of your tax return to claim a refund. If you don’t file your return within this time period, your money goes to Uncle Sam.

The 984,400 taxpayers who did not file a federal income tax return for 2009 could be giving up a little more than $917 million, the IRS estimates.

I know that the government needs the money right now, but I bet you need it more. This procrastination, if that’s why you didn’t file, is costly. More than 120 million individual filers received a tax refund during the 2012 fiscal year. The refunds totaled almost $322.7 billion. The average individual income tax refund (based on Forms 1040, 1040A and 1040EZ) was $2,879.

Maybe you didn’t file because you didn’t have much income. But go back and look at your W-2. Did you have your taxes withheld? The IRS comes up with its estimate by using third-party information it receives, such as reported income tax withholdings on W-2 forms.

There is a catch to getting your refund. The IRS may hold your 2009 refund check if you have not filed tax returns for 2010 and 2011.

“If a taxpayer is facing a time crunch for doing this, the key is to be sure that the 2009 return, at least, is filed by April 15,” IRS spokesman Eric Smith said.

In other good news, the IRS says it is giving late-payment penalty relief to businesses and individuals who request an extension. But the relief is only available to filers attaching to their returns any of the 31 forms that were held up primarily because of the late enactment of the American Taxpayer Relief Act. You remember, this was the law that was passed to prevent a leap over the “fiscal cliff.”

The law had an effect on a number of tax forms, which the IRS had to revise. “Revising those forms required extensive programming and testing of IRS systems, which delayed the IRS’ ability to release, accept and process those forms,” the agency said. “These delays may affect the ability of some taxpayers to timely estimate and pay their 2012 tax liability when requesting an extension to file.”

You are charged a late-payment penalty on tax payments made after the regular filing deadline. The penalty is one-half of 1 percent of the tax you owe per month. There’s no late-payment or late-filing penalty if you file a return late that results in a refund, Smith said.

Some of the delayed 2012 forms include:

Form 3800, General Business Credit.

Form 4562, Depreciation and Amortization (Including Information on Listed Property).

Form 5695, Residential Energy Credits.

Form 5884, Work Opportunity Credit.

Form 8396, Mortgage Interest Credit.

Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit.

Form 8839, Qualified Adoption Expenses.

Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits).

You can find the complete list of the eligible forms by going to www.irs.gov and searching for Notice 2013-24. To qualify for the relief, you have to request an extension to file your 2012 return.

Here’s another piece of vital information. Your request for an extension, which you can make by submitting IRS Form 4868, does not mean that you get more time to pay. You still have to estimate your tax liability and pay that amount by April 15. The extension applies only to filing the return. If you don’t pay on time, the IRS charges interest on the taxes owed.

I know some of you are wondering that if you have to calculate what you owe, why the need to file for an extension?

Many people have complicated returns with lots of forms to fill out. Add in the delay this year and they may well need more time to gather all the supporting documents.

But if you’re asking the question, you probably do your return early anyway. Return-filing procrastinators know what I mean.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or singletarym@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.

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