America's annual tax reckoning is here once again and for many who have yet to file their federal tax return, that means a mad dash to beat Uncle Sam's deadline.
The Internal Revenue Service already has received nearly 100 million tax returns, but anticipates getting about 35 million more by the midnight Tuesday deadline.
Many other taxpayers, however, are opting for plan B and asking for more time to file.
|from the US Postal Service:
Tax advice: Mail those tax forms early!
With the deadline for filing tax returns rapidly approaching, the United States Postal Service reminds last-minute filers to pay special attention to collection box pick-up times and Post Office retail hours on April 15.
Most Post Offices close at 5 p.m. and many collection box pick-up times are earlier. Post Office, Self Service Kiosks and collection box location, hours, and pick-up time information is available at 1-800-ASK-USPS or online at usps.com.
Offices with later hours include:
Buffalo Cayuga Branch Post Office, 285 Cayuga Rd, Cheektowaga - full retail service and April 15th postmark available until 9 p.m. (Please note the Cayuga Branch is no long open until midnight.)
Buffalo Main Office Windows, 1200 William St, Buffalo - full retail service until 6 p.m.
Amherst Branch, 5500 N. Bailey Ave, Amhest – full retail service until 5:30 p.m.
Ellicott Station, 701 Washington St, Buffalo - full retail service until 5:30 p.m.
Williamsville Branch, 5325 Sheridan Dr, Williamsville – full retail service until 5:30 p.m.
Here are some other tax tips:
On April 15, mail early in the day at any Post Office, station, branch or collection box.
If depositing returns in a collection box on Tuesday, April 15, double-check the pick-up schedule on the label. To ensure getting the April 15th postmark, deposit returns before the last scheduled pick-up time.
Stamped packages weighing more than 13 ounces must be presented in person to a Post Office clerk to comply with FAA regulations.
Affix the appropriate postage, especially since the item may weigh more than an ounce. Have a postal sales and service associate weigh and rate the item for you. Tax agencies will not pay postage due and your short-paid return will be returned to sender – and you may miss the deadline (tip: 5 pages equals approximately one ounce).
Furthermore, it is very important that your envelope has a return address. Short-paid items without a return address will be sent to the postal mail recovery office for determination of the sender, delaying its return.
The USPS highly recommends getting the security of proof of mailing and proof of delivery of your tax returns -- use certified mail service with a return receipt, plus the applicable postage.
Tax forms are no longer available at Post Offices. Check at local libraries or online at http://www.irs.gov/ (Federal forms) or http://www.tax.state.ny.us/forms/ (NYS forms).
Please remember that mail must be deposited before the last collection time at the post office or collection box on April 15 to receive an April 15th postmark.
The Postal Service does not receive tax dollars for operating expenses; it relies entirely on the sale of postage, products and services to fund its operations.
Getting started late and rushing to file can lead to headaches, particularly if you haven't organized the various receipts and forms, such as bank statements or W-2 forms that you may need to complete your return.
"When you sit down to do your return at the last minute, if you're realizing you're stuck, don't know what's happening or have an unexpected result and need more help, the best thing to do would be to file for an extension," said Lindsey Buchholz, a principal analyst at H&R Block.
MORE TIME TO FILE, NOT PAY
If it looks like you're not going to make the deadline, and you owe unpaid taxes, it pays to ask for more time. That's because if you miss the deadline and fail to ask for an extension, the IRS will hit you with a monthly penalty of 5 percent of your unpaid tax balance. The quickest way to request an extension is to fill out the automatic extension of time to file - Form 4868 on www.irs.gov . It's also available through most tax preparation software.
Extension requests via mail must be postmarked by Tuesday to be considered on time. Forms filed on the IRS website or by using tax software can be sent in as late as 11:59 p.m. EDT on Tuesday.
Getting more time to file your return doesn't mean you have more time to pay your 2013 tax bill, however.
"Some people mistakenly think that if they owe money and they file an extension that also gets them an extra six months to pay, which is not the case," Buchholz said.
The IRS requires taxpayers to pay up by Tuesday's deadline, or face interest charges on unpaid taxes.
LATE PAYMENT PENALTY
If you file your tax return on time or get an extension, but fail to pay, the IRS will charge a monthly late payment penalty of 0.5 percent of your unpaid taxes. That translates to a $25 penalty if you owe $5,000. It is charged each month or part of a month the tax goes unpaid, up to 25 percent, or $1,250 on that $5,000.
In addition, the IRS will assess an annual 3 percent interest rate, compounded daily, on what you owe.
You can avoid the 0.5 percent late-payment penalty if you pay either 90 percent of your 2013 tax balance by April 15, or if you pay an amount equal to the full amount you paid on your 2012 tax return. For example, if you estimate that you owe $9,000 in taxes for 2013 and you pay 90 percent of that, or $8,100, you won't be charged the penalty. Paying what you paid in taxes last year also would spare you the penalty.
Filers who haven't sorted out their tax return yet and don't know how much they owe can send the IRS a payment based on an estimate of their tax debt. You can use IRS Form 1040-ES, Estimated Tax for Individuals, to calculate what you owe.
If your earnings were roughly the same in 2012 as in 2013, the easiest way to estimate what you owe is to add in slightly more than you owed last year. If you overpay, you'll get a refund after you file your return. If you underpay, you'll have to pay a penalty and interest on the difference.
As millions of Americans race to meet Tuesday's tax deadline, their chances of getting audited are lower than they have been in years.
Budget cuts and new responsibilities are straining the Internal Revenue Service's ability to police tax returns. This year, the IRS will have fewer agents auditing returns than at any time since at least the 1980s.
Taxpayer services are suffering, too, with millions of phone calls to the IRS going unanswered.
"We keep going after the people who look like the worst of the bad guys," IRS Commissioner John Koskinen said in an interview. "But there are going to be some people that we should catch, either in terms of collecting the revenue from them or prosecuting them, that we're not going to catch."
Better technology is helping to offset some budget cuts.
If you report making $40,000 in wages and your employer tells the IRS you made $50,000, the agency's computers probably will catch that. The same is true for investment income and many common deductions that are reported to the IRS by financial institutions.
But if you operate a business that deals in cash, with income or expenses that are not independently reported to the IRS, your chances of getting caught are lower than they have been in years.
A look at your chances of getting audited IRS :
146 million returns.
Audited: 1.4 million.
Audit rate: 0.96 percent.
Income under $200,000
141 million returns.
Audited: 1.2 million.
Audit rate: 0.88 percent.
Income $200,000 and above
5.3 million returns.
Audit rate: 3.3 percent.
Income $1 million and above
Audit rate: 11 percent.
10 million returns.
Audit rate: 0.61 percent.
Small corporations (assets under $10 million)
1.8 million returns
Audit rate: 0.95 percent.
Large corporations (assets over $10 million)
Audit rate: 16 percent.
Source: Internal Revenue Service.
Last year, the IRS audited less than 1 percent of all returns from individuals, the lowest rate since 2005. This year, Koskinen said, "The numbers will go down."
Koskinen was confirmed as IRS commissioner in December. He took over an agency under siege on several fronts.
Last year, the IRS acknowledged agents improperly singled out conservative groups for extra scrutiny when they applied for tax-exempt status from 2010 to 2012. The revelation has led to five ongoing investigations, including three by congressional committees, and outraged lawmakers who control the agency's budget.
The IRS also is implementing large parts of President Barack Obama's health law, including enforcing the mandate that most people get health insurance. Republicans in Congress abhor the law, putting another bull's-eye on the agency's back.
The animosity is reflected in the IRS budget, which has declined from $12.1 billion in 2010 to $11.3 billion in the current budget year.
Obama has proposed a 10 percent increase for next year; Republicans are balking.
Rep. Ander Crenshaw, R-Fla., chairman of the House subcommittee that oversees the IRS budget, called the request "both meaningless and pointless" because it exceeds spending caps already set by Congress.
Koskinen said he suspects some people think that if they cut funds to the IRS, the agency won't be able to implement the health law. They're wrong, he said.
The IRS is legally obligated to enforce the health law, Koskinen said. That means budget savings will have to be found elsewhere.
Koskinen said he can cut spending in three areas: enforcement, taxpayer services and technology. Technology upgrades can only be put off for so long, he said, so enforcement and taxpayer services are suffering.
Last year, only 61 percent of taxpayers calling the IRS for help got it. This year, Koskinen said he expects the numbers to be similar. To help free up operators, callers with complicated tax questions are directed to the agency's website.
"The problem with complicated questions is they take longer," Koskinen said.
Your chances of getting audited vary greatly, based on your income. The more you make, the more likely you are to get a letter from the IRS.
Only 0.9 percent of people making less than $200,000 were audited last year. That's the lowest rate since the IRS began publishing the statistic in 2006.
By contrast, 10.9 percent of people making $1 million or more were audited. That's the lowest rate since 2010.
Only 0.6 percent of business returns were audited, but the rate varied greatly depending on the size of the business. About 16 percent of corporations with more than $10 million in assets were audited.
Most people don't have much of an opportunity to cheat on their taxes, said Elizabeth Maresca, a former IRS lawyer who now teaches law at Fordham University.
Your employer probably reports your wages to the IRS, your bank reports interest income, your broker reports investment income and your lender reports the amount of interest you paid on your mortgage.
"Anybody who's an employee, who gets paid by an employer, has a limited ability to take risks on their tax returns," Maresca said. "I think people who own their own business or are self-employed have a much greater opportunity (to cheat), and I think the IRS knows that, too."
One flag for the IRS is when your deductions or expenses don't match your income, said Joseph Perry, the partner in charge of tax and business services at Marcum LLP, an accounting firm. For example, if you deduct $70,000 in real estate taxes and mortgage interest, but only report $100,000 in income.
"That would at least beg the question, how are you living?" Perry said.
Koskinen said the IRS could scrutinize more returns - and collect billions more in revenue - with more resources. The president's budget proposal says the IRS would collect an additional $6 for every $1 increase in the agency's enforcement budget.
Koskinen said he makes that argument all the time, but for some reason, it's not playing well in Congress.
"I say that and everybody shrugs and goes on about their business," Koskinen said. "I have not figured out either philosophically or psychologically why nobody seems to care whether we collect the revenue or not."