A day before 2016 federal tax returns were due, a Tallahassee-based watchdog group said Floridians were done paying taxes in a different, mythical sort of way.
Florida TaxWatch said Monday that Florida’s 20 million-plus residents had achieved “tax independence” — a symbolic calculation that assumes every dollar they have earned since Jan. 1 had been used to pay their share of federal, state and local taxes. If that had been the case, TaxWatch said, as of Monday Floridians would be “earning money for themselves.”
For 2017, TaxWatch estimated it took 107 days to get to tax independence, same as in 2016. That’s better than in 2014, when it required 109 days, but not as good as the 96 days it took to reach this point in 2009.
That said, TaxWatch president and CEO Dominic Calabro, said the state has a “very good tax system that has been built over generations. The issue is with how we spend our money.”
Overall, Floridians in 2017 are expected to pay $281 billion in taxes to federal, state and local governments — $38 billion to locals, another $46.2 million to the state and $196 billion to Uncle Sam.
The TaxWatch announcement came as the Associated Press on Monday reported that residents of Washington, D.C., pay the most money in federal taxes in per capita terms.
The tax bill for residents of the District of Columbia paid to the U.S. government totaled $37,000 per person in federal income, payroll and estate taxes. Second place went to people from Delaware — $16,000 per person.
The lowest per capita federal tax contributions were from West Virginia ($3,600), Mississippi ($3,900) and New Mexico ($4,000).
The AP said it calculated each state’s per-capita tax bill using data from the IRS and population estimates from the Census Bureau.
The deadline to file federal tax returns was pushed back because the usual April 15 deadline landed on Saturday. On top of that, Monday was a holiday in the District of Columbia.
As the deadline approached, more than 100 million taxpayers had already filed their returns for 2016. Still, millions will be rushing to make the April 18 deadline.
The Internal Revenue Service also expects about 13 million taxpayers will not file a full tax return by the deadline.
So what do you do if you are one of those who needs more time?
DO: File for an extension by Tuesday, April 18. That buys you six months to file a full return by Oct. 16, 2017.
DON’T: Think this has no financial consequences.
“If you owe taxes, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 18,” an IRS statement says. “The interest rate is currently four percent per year, compounded daily, and the late-payment penalty is normally 0.5 percent per month.”
DO: Use IRS Form 4868.
There are three ways to request an automatic extension, the IRS says: 1. You can pay all or part of your estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System, or using a credit or debit card. 2. You can file Form 4868 electronically by accessing IRS e-file using your home computer or by using a tax professional who uses e-file. 3. You can file a paper Form 4868 and enclose payment of your estimate of tax due.
DON’T: Freak out.
“With the tax deadline approaching, taxpayers shouldn’t panic,” said IRS Commissioner John Koskinen. “The IRS has many options available to help people as they finalize their tax returns or if they need to get extra time to file.”
Reporting from business writer Charles Elmore was used in this report.