“This year people are coming in a week later than normal,” to file their taxes, says fee-only financial planner Bernard Kiely of Kiely Capital Management in Morristown, N.J. Also a CPA, Kiely has been providing planning and income-tax services for individuals for more than 25 years.
Why? Kiely told AdvisorOne in an interview late Thursday that he thinks it’s because the filing deadline was postponed from the usual April 15 deadline—a Friday, until April 18—the next business day. Washington DC government offices are closed for a holiday on April 15th this year.
The IRS has received 89,713,000 individual income tax returns in 2011, as of April 2. That’s down -0.3% from the 89,970,000 returns received one year ago.
“One retired couple,” whose returns Kiely’s prepared for more than 20 years “have not even come in yet,” he added. One thing that’s new this year is that all returns filed by a paid preparer must be filed electronically, Kiely notes.
The e-filing is good because, he argues, the IRS used to have to “keypunch a lot of information and they made a lot of mistakes.” For instance, “they would put a long-term capital gain in as short term. The tax is higher,” on a short-term gain, so the IRS would let the taxpayer know they owed more tax and Kiely would have to set them straight.
Now that the returns are e-filed, though, “people are confused about of how to pay. The return is separate from payment now,” Kiely explains.
One of Kiely’s client’s returns was rejected because “their daughter’s taxpayer ID number appeared on another return. Her boyfriend claimed her as a dependent.” Another couple’s return was “rejected when their daughter got an apartment and filed her own taxes,” and her taxpayer ID appeared on both returns. When Kiely tried to file an amended return, he found he could not do that electronically. So there are a few bugs to work out but they appear to be minor.
More Audits for E-filers?
There was an urban legend circulating a year or two ago as e-filing got popular but wasn’t mandatory for preparers: more audits of those who e-file. But Kiely says “audits are really down in the last three years. They get all the data—they don’t have to keypunch anything.”
Meanwhile, the IRS has received a total of 76,895,000 e-filed returns this year, up 7.4% from last year. Tax preparers filed 48,861,000 of those returns, up6.3% from a year ago. Individuals e-filed