Many of us may still procrastinate up until the final hours before the deadline to file our federal income tax returns, but most won’t be scrambling to find a stamp and make a mad dash to the post office before midnight tonight.
And it’s not even because Americans had two additional days to get their returns in. Because April 15 fell on a Sunday and Emancipation Day is a holiday in the District of Columbia, taxpayers have until midnight tonight to file.
Only a handful of taxpayers file by mail anymore. Of the 135.6 million returns filed last year, 92 percent were filed electronically, most through a tax preparer, although 38 percent of taxpayers prepared their own returns and e-filed them. It’s generally quicker — and thanks to tax-prep programs, such as Intuit’s TurboTax — easier, and it can mean any tax refund gets to you more quickly, especially if you’re using direct deposit.
But it could be even quicker and easier, and this isn’t about the “postcard” tax return that President Trump, House Speaker Paul Ryan and others were talking up last year during discussions of the Republican tax cut legislation that Congress passed late last year.
In promoting the tax plan, Trump and Ryan waved around a mock-up of the postcard tax return, but that idea didn’t survive in the final bill.
That hasn’t stopped Trump from continuing to promote the postcard as an actual option for taxpayers next year. During an April 5 round-table discussion on tax reform, Trump boasted of a simpler return: “Next April you’re going to, in many cases, (file) one page, one card. It’s going to be very, very different. Very, very different.”
Politifact, in rating Trump’s claim “mostly false,” points out that taxpayers already have the option of a one-page return, the 1040EZ, which is used by about 1 in 6 of those filing returns. And more Americans may indeed use the 1040EZ next year because of the increase in the standard deduction that was part of the GOP tax plan.
But even easier than a postcard would be a tax form with most of the information — such as income and withholding from W-2 forms and investment income from 1099 forms — already filled in by the IRS, which gets the same information from employers and others that taxpayers do.
The idea is among several pieces of legislation suggesting ways to improve the annual chore of tax filing, including the Tax Filing Simplification Act, sponsored by Sen. Elizabeth Warren, D-Massachusetts. Under the act, the IRS would send taxpayers a “pre-populated,” form that they could review, make any additions or changes to, and sign and submit. Or they could choose to complete another form, depending on individual needs.
The idea has been kicked around for a while, as early as 1985 by President Reagan.
Along with making filing easier and quicker, it would also benefit some low-income families who are eligible for Earned Income Tax Credits but don’t receive the benefit because they don’t file tax returns. About 20 percent who are eligible don’t file, reports Vox, and returns from those who do often contain errors because of the complexities of the tax credit’s rules.
Other proposals in Congress would improve the IRS’s customer service, improve the “free file” program that allows low- and middle-income taxpayers to file electronically for free, make it easier for victims of ID theft to report problems to the IRS and even allow for the payment of taxes with a debit or credit card.
There are much larger issues stemming from the Republican tax plan that future Congresses will need to face, specifically the estimated annual budget deficits of $1 trillion or more that the corporate tax cuts — paired with the federal spending Congress approved earlier this year — will deliver as soon as 2020, according to the Congressional Budget Office.
In the meantime, a little less running around to gather up various forms, records and receipts would be welcomed.