April 15 Syndrome

In tax year 1988, delaying filing income tax returns cost the 73.2 million taxpayers claiming refunds nearly one billion dollars of interest. 'Impatient' tax filers, who mail in their tax payments before the filing deadline, passed up $46 million in interest. The authors develop a model of tax filing based on stochastic opportunity cost and then investigate whether filing times are consistent with that model. They find some evidence for this because, ceteris paribus, higher refunds are associated with earlier filing and complex returns are associated with later filing, as are higher incomes (as a proxy for higher costs of time).