Tax day deadline: What you need to know to file your returns

Tax day has arrived, and most Americans have until 11:59 p.m. tonight in their local time zone to file their 2023 returns without incurring a late fee.

The 2024 filing season has been marked by improved service metrics on the heels of an $80 billion funding boost for the IRS. The money has helped the agency increase its digital capabilities and allows more people to interact with the IRS online, including through a new online tax filing tool that rivals similar products from the private sector.

The free IRS Direct File program hit 100,000 accepted returns, the Treasury Department said Monday.

Residents of Maine or Massachusetts have until Wednesday, April 17, to file their taxes due to state holidays.

Americans seeking an extension on the filing deadline can fill out a Form 4868 to get until Oct. 15 to send in their 2023 returns, though Americans living abroad may be able to extend further.

Here’s a look at the major issues and filing statistics for this tax season.

Different ways to file for free

The centerpiece of the 2024 filing season from the perspective of the IRS is likely the Direct File pilot program, the new online tool available in 12 states that allows taxpayers to file their returns directly on an IRS website.

More than 100,000 people have filed returns using the new system, a Treasury Department official said Monday, noting that interest in the program has “surged” over the past few days.

“More than 50,000 taxpayers have successfully filed their returns using Direct File over the past week, and the goal of 100,000 returns accepted was met mid-day on Sunday, April 14,” the official said in a statement provided to The Hill.

The new system comes after a backlash against Intuit, maker of the popular commercial tax filing software Turbo Tax, which was targeted by states attorneys general in 2023 for deceptive marketing practices resulting in a multimillion dollar class action settlement. It has also been censured for deception by the Federal Trade Commission.

Direct File is one of a few free tax preparation options available to U.S. citizens. These include the Free File public-private partnership between the agency and tax prep companies, which have been criticized for steering users toward costlier options, as well as some volunteer tax help programs coordinated by the IRS.

There’s also MilTax, a Defense Department program that offers veterans and members of the military free return preparation and electronic filing options for federal tax returns.

Service ticks up while pandemic backlogs fester

The IRS is touting improved phone service following $1.1 billion newly spent on taxpayer services from its $3.2 billion budget increase, passed as part of the Inflation Reduction Act (IRA).

“Continuing a trend seen last year following the addition of 5,000 new telephone assistors, the IRS level of service on its main phone lines reached more than 88 percent,” the IRS said in a Monday statement, noting a “a five-fold increase from the phone service levels seen during the pandemic era period.”

“Levels of service” at the IRS are an internal technical metric that does not count the number of callers who are routed to a robot or who hang up before they reach an agent. Only 29 percent of calls to the agency were actually answered by a person during fiscal 2023, according to the National Taxpayer Advocate, with overall 2024 percentages not yet available.

During the 2024 filing season taxpayers waited an average of three minutes for help on the IRS main phone lines, the IRS said Monday. 

The agency said it answered more taxpayer calls this year, marking a 16.8 percent increase from 2023. IRS staff answered 7,608,000 calls, up from 6,513,000 in the year before.

The Government Accountability Office said in February that the IRS had a backlog of 6.1 million tax returns by the “end of the last filing season,” which was 10.3 million fewer than at the same time in the previous year.

Increasing digitization of taxes 

The IRS website had around 500 million visits during the 2024 filing season, constituting an 18-percent increase from the previous year, the latest sign of increasing digitization in U.S. taxes.

The agency attributed this uptick to interest in the “Where’s My Refund?” tool, which accounted for more than half of all the visits at 275 million, up 29 percent since 2023.

Recent IRS data show that returns have increasingly been filed digitally over the last decade. While 15.49 percent of individual returns were filed with paper hard copies in 2014, that percentage fell to 6.18 percent in 2022.

The IRS website has other tools that taxpayers can use to file their taxes, including a list of payment options and various best practices for filling out returns.

For people who are unable to pay what they owe in full on their 2024 taxes, the IRS offers monthly payment plans that can be processed over the course of up to 72 months.

The IRS is getting modernized

IRS service improvements are occurring against the backdrop of a major agency overhaul, made possible by the IRA funding boost.

A recent analysis of that spending by the Treasury Inspector General for Tax Administration (TIGTA) found that about 5.6 percent of that money has been spent so far.

Most of the $80 billion is going to increased enforcement, which the Biden administration is aiming at large corporations and individuals that make more than $400,000 a year.

But just 1 percent of the $44 billion set aside for ramped-up audits has been spent so far, according to TIGTA, a consequence of the fact that additional enforcement requires skilled auditors who take time to hire and train.

IRS officials have said that increased audit rates and recouped funds from additional tax enforcement will take years to see in the data.