Americans Rush To File Taxes As Deadline Looms

As the annual tax deadline approaches, millions of Americans are gearing up to file their returns, but not all are moving at the same pace. According to a recent survey reported by MoneyLion.com, a striking 74% of Americans plan to file their taxes early this year, yet a significant number still opt for the last-minute rush. Fourteen percent of respondents say they’ll file during the week of Tax Day, 7% will submit on April 15 itself, and another 6% are planning to request an extension.

Federal taxes are due on April 15 each year—a date etched into the minds of taxpayers across the country. While the temptation to procrastinate is real (let’s face it, who hasn’t considered putting off this annual chore?), experts warn that waiting until the eleventh hour can be a risky move. “If you wait until the last minute, you’re risking that something will come up that will put you in a bind to make the deadline, like an unexpected illness or a project at work that demands your time,” Stephen Henley, CPA and senior managing director at CBIZ MHM, told MoneyLion.com. “This just amplifies your stress level.”

The cost of missing the tax deadline isn’t just psychological. The IRS imposes a “failure to file” penalty of 5% of unpaid taxes for each month a return is late, capping at 25%. And if you still haven’t paid your taxes after that, there’s an additional failure to pay penalty. In short, the longer you wait, the pricier it gets.

But the consequences aren’t just financial. Filing early brings a host of other benefits that tend to get overlooked. For one, it could mean better service from your accountant. “If you start early, you get accountants before they become tired,” explained Tatiana Tsoir, CPA and founder of Linza Advisors, in her interview with MoneyLion.com. “The truth is that we are all people and can make mistakes. If you come to us early, you may get the accountant to pay a little more attention to your business and what can be done better next year.”

That extra attention can pay off. When you’re not rushing, you have more time to double-check your return, ensuring you don’t miss out on deductions or make costly errors. “If a mistake is made on your return when you file, that oversight could result in an audit or an unexpected, large tax bill,” said Mark Jaeger, VP of tax operations at TaxAct, speaking to MoneyLion.com. “Mistakes can happen, but it’s important to be as careful as possible.”

And then there’s the ever-present threat of tax fraud. Filing early is one of the best defenses against fraudsters, who often try to file returns using stolen identities to snag refund checks. But if you’ve already filed, you close the door on that scam. The longer you wait, the more vulnerable you are to these criminals.

Another perk of early filing? If you’re owed a refund, you’ll get it sooner—and the earlier you get your hands on that money, the sooner you can put it to work. “A refund is simply money you earned throughout the previous year and, unfortunately, the IRS held onto it interest-free,” Jaeger noted. “Getting that money back as quickly as possible will give you more opportunity to invest it in a retirement or investment account and make that money work for your financial benefit.”

The MoneyLion.com survey, conducted using PureSpectrum’s platform, polled 1,005 Americans aged 18 and older from January 23 to January 26, 2024. Respondents were quizzed on everything from their filing plans to their biggest tax day concerns. The results revealed not just procrastination habits, but also a widespread anxiety about audits—an issue that financial expert Emily Shacklett tackled head-on in her recent advice to taxpayers.

According to a separate poll cited by Shacklett, a quarter of American taxpayers are concerned about being audited by the IRS. And with the April 15 deadline looming, she’s offered up three crucial mistakes to avoid if you want to stay off the IRS’s radar.

The first mistake, Shacklett told reporters, is failing to sign up for a free ID.me account. This digital tool lets taxpayers see prior year returns and track income forms sent to the IRS by employers. “That’s really important, because I see a lot of ‘matching’ errors trigger audits, which is what happens when the IRS notices that there are fewer income forms filed on a return than it received,” she explained.

The second pitfall involves Schedule C, the form used to report business income and expenses. Home office deductions, in particular, are a red flag. “Don’t overstate your expenses as it could trigger an audit, and the IRS will likely ask for documentation to prove questionable numbers,” Shacklett warned. Deductions and expenses on Schedule C are often subjective, so accuracy is key—and documentation is your best friend if the IRS comes knocking.

Finally, Shacklett highlighted the growing scrutiny on digital currency and crypto transactions. “Every tax season, the IRS focuses on certain areas of tax returns. This year, one of the areas is digital currency and crypto transactions,” she said. “These transactions can be complex, which means it is easy to make mistakes when entering information on a tax return.” Her advice? Keep meticulous records and, if possible, work with a professional to ensure everything is reported correctly.

Taxpayers are clearly feeling the pressure. The MoneyLion.com survey found that many Americans are worried about missing deductions, making mistakes, or simply not understanding the tax system well enough to avoid trouble. And with the IRS stepping up enforcement on everything from home office claims to crypto gains, the margin for error is shrinking.

So, what’s the takeaway for anyone staring down the April 15 deadline? Don’t wait. Filing early isn’t just about peace of mind; it’s about protecting yourself from penalties, fraud, and the stress of a last-minute scramble. Take the time to gather your documents, check your forms, and, if needed, consult a professional—especially if your finances are complicated by business income or digital assets.

As the clock ticks down to Tax Day, Americans have more resources than ever to help them file accurately and on time. But as the experts remind us, the best strategy is still the simplest: start early, double-check your work, and don’t let procrastination turn tax season into a crisis.