- IRS data showed a 56% drop in filings for households with incomes over $1 million
- Overall, tax filings by mid-May 2019 fell by 14% due to Tax Day delay
- Data consistent with overall tax filing patterns established in the past few decades
As Tax Day 2020 looms near for both tax preparers and taxpayers, it appears that high-income households are the ones shouldering most of the burden to get their filings in on time. According to IRS data and the Wall Street Journal, there was a 56% decline in returns filed by households with a combined income of $1 million or more when data was polled in mid-May. The apparent direct relationship between household income and delay in filings remains consistent as you move down the income brackets as well. For example, return filings for households with $200,000 in combined income fell by 30% as well. Overall, the IRS reported a decrease of 14% of tax return filings when compared to last year, showcasing the effect the Coronavirus pandemic has had on both the deadline and taxpayers’ willingness to file in advance of the deadline.
As reported by the WSJ, the trend of higher-income households filing taxes is consistent with past tax seasons, although the proportionate size of the US population doing so in 2020 appears to be larger than in the past. Delays in filing for higher net worth players often involve the complexity of their tax situation. However, it is plausible to assume that most taxpayers sought to hold onto as much cash as possible this year due to the uncertainty caused by the Coronavirus pandemic.
For any and all tax advice, please do not hesitate to visit our website, including our DSJCPA COVID-19 Information Center, to explore the resources we offer to clients or to speak to our DSJ Tax Team to ensure all of your business needs are met prior to the clock striking midnight on July 15th!
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