Deadline days away for filing returns

Columbus Dispatch

Guess the size of the largest Ohio income-tax refund check in the past five years.

Guess again.

Bigger.

Still bigger.

If your guess isn’t in the mid seven figures, you’re not even close.

It was $5,002,300.

Who said taxes couldn’t be fun?

With the stress of Wednesday’s tax deadline building, it’s a good time for some tax trivia.

If you end up writing the state a check to settle up your income taxes, consider yourself unlucky: Fewer than one in five Ohioans end up owing the state money on top of withholdings and quarterly payments.

State data show that about 18 percent of us have to write checks, while nearly three-fourths of us end up cashing them.

The most current data on state income taxes is from 2012. (The government is allowed to be late on tax information; you’re not.) For the 2012 tax year, more than 5.3 million state tax returns were filed — some individual, some joint.

More than 3.9 million of those returns included a request for a refund, while 938,942 owed taxes. Others either nailed their tax estimates or applied a refund to the following tax year.

The average refund paid? $312.

The average debt? $1,021.

Except for a dip in 2010, refunds have grown steadily over the years. In 2009, the average was $266, and it climbed about 17 percent since.

On the flip side, the average amount owed has jumped 53 percent, from just under $666 in 2009 to more than $1,021 in 2012.

State tax officials think Ohioans are doing a good job with their taxes. After all, they say, getting to within $312 of your tax bill for a year is fairly accurate.

So why do so many of us get state refunds? Are our employers withholding too much? Are the self-employed estimating too high with their quarterly payments? Or are the state income-tax cuts driving the growth in refunds?

Yes, yes and yes.

“The income-tax withholding tables are typically set a little high because we don’t know how many exemptions any person is going to claim,” explained Marjorie Kruse, deputy tax commissioner. In addition, “people will have additional taxes withheld from their check because they use it as a savings account.”

Ultimately, Kruse said, “people would rather have a small refund than owing a small amount.”

Those small checks add up to a giant bill of sorts for the state: It refunded more than $1.2 billion in 2012. Helping to pay for it were the checks from those who owed at year’s end:

$958.9 million.

But if you think your tax bill is a challenge, guess the largest amount owed by a single taxpayer in recent years?

$9,845,621 in 2007.

The state can’t say who paid that amount or who got the largest refund checks because of privacy laws. It could have been anybody: A professional athlete, a CEO or a successful business owner (businesses don’t pay state income taxes, but those who own them do).

While the average refund is $312, some are quite large ‘” with those making the most, and paying the most in taxes, receiving the largest refunds.

Those reporting incomes of more than $10 million (yes, $10 million) had average refunds of $23,210. Those who owed taxes from that income group paid an average of $88,313.

So, how many taxpayers reported incomes of more than $10 million in 2012?

Wait for it ... 1,844.

Of those, 271 were full-time Ohio residents, while the others spent part of the year in another state. The highest-income group showed total income of $72.3 billion in 2012, or an average of $39.2 million.

Tax officials didn’t blink when asked about the number of folks reporting eight-digit incomes.

“When you consider 5.4 million people are filing, 1,800 of anything doesn’t seem large to me,” said Deborah Smith, income-tax administrator. “You’ve got to put it in perspective.”

As you can imagine, most of us who are owed money get our returns in early, while those who must write a check wait until the last minute to file.

“I know from watching staff — and I watch them every week throughout tax season — by [April 6], we have about 82 or 83 percent of the overall refunds requested and paid that will be paid’ by April 15, Smith said.

Are most extensions filed by those who owe?

Nope. “It’s almost a 50-50 split at extension time,” Smith said.

Joe Testa, the state tax commissioner, said the department is slammed with tax returns and has shifted the workday to make staff members available to answer questions more hours — without more overtime.

Right now, the questions center on fraud.

The state instituted a quiz for those receiving refunds to cut down on identify theft and fraud. A letter requests them to go online and verify their identity.

A typical call? “I got this letter; is it legitimate?” Testa said. It probably is, but you should call the state to make sure.

“People seem to be surprised at how much [fraud] there is out there,” he said.

How much? The state intercepted a total of about 66,000 returns last year fraudulently seeking refunds totaling $278 million.