Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations
We are off the air in Vernal. While we work to resume service, listen here or on the UPR app.

The tax deadline is nearing

AILSA CHANG, HOST:

All right. The deadline for filing income taxes is now less than a week away. The IRS expects to receive tens of millions of returns in the coming few days. And NPR's Scott Horsley has some tips for those of you who are still combing through a shoebox full of receipts or wondering if you owe taxes for that handmade scarf you sold on Etsy. Hey, Scott.

SCOTT HORSLEY, BYLINE: Hi, Ailsa. Good to be with you.

CHANG: Are you knitting now? What is this?

HORSLEY: (Laughter) I'm more of a crochet person.

CHANG: (Laughter) Well, there's always a bit of a stampede as we approach that April 15 deadline. So what's it looking like this year?

HORSLEY: As of the last week in March, 90 million people had already filed their taxes, and the IRS had processed 88 million of those. So there's no big backlog this year. It certainly helps that almost everybody's filing electronically these days. That really speeds things up. No more stacks of paper returns piling up in government cafeterias. More than two-thirds of the people who filed so far got tax refunds, and the average refund was just over $3,000.

CHANG: Hmm. Well, you've told us before that there's a new option this year that lets some taxpayers sidestep paid software and tax preparers. Can you just remind us about that?

HORSLEY: Yeah, it's called Direct File, and it's a new service the IRS is experimenting with this year. It lets people file online returns directly with the government at no cost. Now, so far, it's a small pilot. It's only available in 12 states and only for people with fairly simple tax situations. The IRS is hoping maybe 100,000 people might take it for a spin this year. And then if it works well, it might be expanded in future years.

If you're not eligible for Direct File, but you make less than $79,000, you might still qualify for other free options. Just search for IRS free file. But be careful. Don't click on the first link that pops up. Make sure you're going to an actual IRS website.

CHANG: Got it. OK, well, what if you just can't get your taxes done by the deadline, which is Monday in most parts of the country, right?

HORSLEY: Yeah. If you can't meet that deadline, you should go ahead and file for an extension. That'll buy an extra six months - until October 15. But remember, if you think you owe money to the government, you should go ahead and pay now so you don't face a penalty or interest for an overdue payment. By the way, taxpayers in Massachusetts and Maine automatically get a little extra time this year because of state holidays. Their deadlines are April 17.

CHANG: Huh. OK, well, what if I knit, and what if I sold that handmade scarf on Etsy or offloaded some concert tickets on StubHub? Do I have to pay taxes on the money I made?

HORSLEY: Yeah, there's some confusion around this. A few years ago, Congress passed a law saying platforms like Etsy and StubHub or Venmo would have to send a 1099-K form to anyone who made more than $600. And those platforms were also supposed to tell the IRS to make sure people who did make that money paid the taxes they owed. The idea was to crack down on people who were earning a lot of money under the table and not paying taxes.

After complaints, though - this was going to trip up a lot of small-time hobbyists or babysitters - the IRS decided late last year to postpone the new reporting requirement. So for now, those websites only have to report people with at least $20,000 in sales and 200 transactions. So that's a big relief for a lot of small sellers. However, they're not completely off the hook. The reporting threshold is supposed to drop to $5,000 in the 2024 tax year and all the way down to $600 in 2025, unless it gets postponed again.

Now, I should note none of this changes anybody's tax liability. So if you're making a lot of money on those handmade scarves, Ailsa...

CHANG: (Laughter).

HORSLEY: ...You're supposed to pay taxes on the gain. The reporting rules just affect the government's ability to keep track of all that.

CHANG: That is NPR's Scott Horsley. Thank you so much for your tax advice, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.