CHICAGO — For the first few months of each year, the dreaded tax filing deadline looms over the heads of Americans. Some jump on their taxes as soon as possible to get a head start, but some allow Tax Day to slowly creep up on them, leaving everything to the last minute. It turns out that where you live may reveal how likely you are to put off filing your taxes.
Commissioned by IPX 1031, a recent survey on tax procrastination finds that the number one state that leaves paying Uncle Sam to the last minute in 2023 is Wyoming, followed by Vermont, Alaska, North Dakota, and South Dakota, respectively.
This isn’t all that surprising for The Last Frontier state, as Alaska has been in the top five when it comes to last-minute filers since 2021. Rounding out the top 10 are Delaware, Rhode Island, Montana, Maine, and New Hampshire.
As for the taxpayers on the IRS’ “good list,” residents in Ohio procrastinate the least when it comes to filing. Pennsylvania, Florida, Texas, and Michigan round out the top five early filing states.
Tax procrastination by city
The poll also examined who puts the brakes on filing among the 30 largest cities in the U.S., with Baltimore taking the number one spot in 2023. The Charm City moves up from its 4th place spot in 2022. Previously first in 2022, Las Vegas ranks second, followed by Boston, Denver, Portland, Detroit, Washington D.C., Louisville, Seattle, and Memphis.
As study authors have found in previous years, the most populated cities are home to the least amount of tax procrastinators. New York City, Chicago, and Los Angeles finish at the bottom of list, meaning many residents living here get their taxes done and over with right away each year.
Why do people procrastinate on their taxes?
Nearly one in three (30%) respondents feel they are not prepared to file their taxes in 2023. Overall, 32 percent admit to procrastinating when it comes to their taxes. Forty-one percent plan to file in February each year, 26 percent leave it until March, and 17 percent scramble with last-minute filings in April.
It might not be too surprising that the top reason people avoid doing their taxes is that they find it too complicated and stressful. Others don’t care for the time commitment or don’t believe they’re getting a refund.
When it comes to actually doing the dreaded deed, 70 percent say they file with an online service, 23 percent hire an accountant or tax preparer, and seven percent seek the help of family or friends.
Some of the best tax software can be a lifesaver during tax season. The cherry on top? There are a lot of free tax filing options as well. You’re already going to have to pay your dues, so don’t add on unnecessary expenses with our list of the best free tax filing software.
Another reason people procrastinate is because many simply don’t know when the deadline is. Tax Day in 2023 is April 18. However, nearly one in three Americans are not aware of this. Who makes up those who don’t know? Fifty-three percent of Gen Z, 33 percent of millennials, 23 percent of Gen X, and 20 percent of baby boomers are unsure of the annual deadline. In fact, 13 percent of Gen Z respondents and nearly one in 10 millennials polled believe Tax Day is April 20.
Refund hopes and dreams
The one upside in filing taxes is the hope of receiving a sizable refund. Unfortunately, two in five Americans expect their tax return to be smaller in 2023 than in 2022. On average, Americans expect a return of $1,956 this year.
Millennials expect the highest refund, averaging at $2,161. Even though the majority expects to receive less money, one in five are still looking up, with expectations of a higher refund than in 2022.
What are people planning to do with this extra cash? Top things include saving it for a rainy day, paying off pesky debt, using it on everyday expenses, paying rent or a mortgage, or investing.
When investing, you commit to claiming such activity within your taxes. More than half (51%) of respondents report currently having investments. Among them, 42 percent say they get help from online services to file taxes on their investments, with 29 percent filing on their own.
In January 2023, researchers conducted a survey of 1,007 people from around the U.S. Among respondents, 48% identified as male, 49% as female, and 3% as non-binary or transgender. Respondents aged in range from 18-90 with an average age of 39.
To rank the states and cities, IPX 1031 analyzed nearly 200 Google search terms relating to the tax filing deadline from January-September 2022. They took the average number of monthly searches for each state and city and calculated the searches per 100,000 residents.