MoCo tax revenue fell 30% due to taxpayers filing extensions

[Anonymous]

This is crazy. Why would 30% of the county need extensions on their taxes?! https://www.google.com/amp/s/wtop.com/montgomery-county/2017/12/shocked-montgomery-co-scrambles-cut-budget-amid-revenue-shortfall/amp/

[Anonymous]

It's probably only 1% filing extensions, but they're the high earners who pay 30% of the taxes

[Anonymous]

My K1s are delayed every year, and sometimes I need the extra extension as well. However I'm still paying estimated taxes, as you must do when filing extensions, so something about this doesn't scan...

[Anonymous]

I have to get an extension almost every year. Always have K-1's not arriving until April 5th or so. One year I filed and amended, it turned into a cluster fuck with the IRS, so now I just extend. I don't want my CPA to be rushed while doing my taxes.

[Anonymous]

This doesn’t ring true. When you file an extension it’s to file your tax forms, not make the payments. You pay penalties if you haven’t paid your taxes before the actual deadline. You are supposed to estimate your tax obligation and make that payment by 4/15.

[Anonymous]

Anonymous wrote:This doesn’t ring true. When you file an extension it’s to file your tax forms, not make the payments. You pay penalties if you haven’t paid your taxes before the actual deadline. You are supposed to estimate your tax obligation and make that payment by 4/15.

Interesting. What’s a more likely explanation?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This doesn’t ring true. When you file an extension it’s to file your tax forms, not make the payments. You pay penalties if you haven’t paid your taxes before the actual deadline. You are supposed to estimate your tax obligation and make that payment by 4/15.

Interesting. What’s a more likely explanation?

Bad reporting. Here’s the Post’s explanation:

“In a Nov. 30 memo, chief administrative officer Timothy Firestine said the shortfall was driven primarily by a nearly 30 percent decline in income tax revenue from taxpayers filing extensions for tax year 2016.”

Which I read to mean that people who filed extensions owed less than the county expected.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This doesn’t ring true. When you file an extension it’s to file your tax forms, not make the payments. You pay penalties if you haven’t paid your taxes before the actual deadline. You are supposed to estimate your tax obligation and make that payment by 4/15.

Interesting. What’s a more likely explanation?

Bad reporting. Here’s the Post’s explanation:

“In a Nov. 30 memo, chief administrative officer Timothy Firestine said the shortfall was driven primarily by a nearly 30 percent decline in income tax revenue from taxpayers filing extensions for tax year 2016.”

Which I read to mean that people who filed extensions owed less than the county expected.

+1 That story doesn't make sense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This doesn’t ring true. When you file an extension it’s to file your tax forms, not make the payments. You pay penalties if you haven’t paid your taxes before the actual deadline. You are supposed to estimate your tax obligation and make that payment by 4/15.

Interesting. What’s a more likely explanation?

Bad reporting. Here’s the Post’s explanation:

“In a Nov. 30 memo, chief administrative officer Timothy Firestine said the shortfall was driven primarily by a nearly 30 percent decline in income tax revenue from taxpayers filing extensions for tax year 2016.”

Which I read to mean that people who filed extensions owed less than the county expected.

+1 That story doesn't make sense.

I mean, the WTOP story didn't make sense. The Washington Post story does make sense. MoCo projected higher revenues than actually came in. I.e. it's not the fault of people filing extensions, but is the fault of poor forecasting by MoCo. This should not shock anyone. MoCo is terrible at planning in all areas.
https://www.washingtonpost.com/local/md-politics/montgomery-faces-budget-shortfall-of-120-million/2017/12/04/4883a7fa-d929-11e7-a841-2066faf731ef_story.html?utm_term=.eb671ef7a4cc

[Anonymous]

Anonymous wrote:It's probably only 1% filing extensions, but they're the high earners who pay 30% of the taxes

This, right here.

I'll bet less than 1000 filers in Montgomery pay 50% (or more) of all the taxes in the county.

But they're not paying their fair share, dontchaknow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's probably only 1% filing extensions, but they're the high earners who pay 30% of the taxes

This, right here.

I'll bet less than 1000 filers in Montgomery pay 50% (or more) of all the taxes in the county.

But they're not paying their fair share, dontchaknow.

Read the Washington Post story. The point is not that people were filing extensions, but rather that MoCo didn't predict the revenue from those filing extensions very well (overly optimistic projections.)

[Anonymous]

I mean, the WTOP story didn't make sense. The Washington Post story does make sense.

This is also not shocking.

[Anonymous]

The headline on this thread is wrong. Tax revenue did not fall due to taxpayers filing extensions. You still have to pay estimated taxes when you file an extension. Tax revenue fell because income was not as high as expected.

[Anonymous]

Maybe if MoCo didn't spend so damn much money in the first place, they wouldn't have a short fall.

[Anonymous]

Huh? You still have to pay even if you extend. You need to estimate.