Experts say refunds are a bad deal, but taxpayers, particularly the young, like receiving an annual windfall. Last year's average refund was $3,003.
This article is by Laura Saunders of The Wall Street Journal.
Three-quarters of all filers will get refunds this year, about the same as usual -- but the amount of those refunds has surged over the past decade.
While the practice of overpaying Uncle Sam throughout the year in order to collect a big refund the next was once sacrilege to personal-finance experts, the rationale is getting more compelling.
Last year's average refund reached a new high of $3,003, and this year's average is tracking last year's, says Internal Revenue Service spokesman Eric Smith. That is almost twice the $1,698 average of 1999. The growth far outstrips inflation.
A close look at tax data shows the growth in refunds hasn't been confined to taxpayers at any one income level, says economist Roberton Williams of the Tax Policy Center in Washington. Some people who suffered job or investment losses in the 2001 or 2007-09 recessions did overpay inadvertently, and received bigger refunds, but these increases don't explain the total rise.
A new study finds that for first time since the Great Depression, tax receipts from households total less than the government paid out in unemployment, Social Security and other programs.
With President Obama’s deficit-reduction plan now on the table, the political left, right and center are ready to rumble over how to assure long-term fiscal stability. The big questions are where to slash and by how much. But over the next year or two, the most important question for the economy might well be how quickly the cutting should begin. Households have become unusually dependent on the government for income support and removing that prop too fast could put the recovery at risk.
White House provides online calculator that breaks down your tax payment the way it is allocated by the fedral government -- at least most of it.
I hope all y'all came through Tax Day relatively unscathed.
Even though most people get refunds when they file their returns, it's still no fun to fill out the forms detailing how much of our money goes to Uncle Sam.
Exactly how that money is and will be spent is the prime topic nowadays on Capitol Hill. Congress finally agreed last week on a budget to keep federal offices open through Sept. 30.
Discussions on the next fiscal year budget, however, are likely to be more difficult.
A lot of the debate centers on which programs get how much money. Several organizations have created graphics depicting the expenditures.
But the most popular populist budget tool right now is the taxpayer receipt. Advocacy groups have devised programs to break down our taxes to a more personal level.
Now the White House is getting in on the act.
The Obama Administration has released its version of an online federal taxpayer receipt calculator.
First family paid 26% of adjusted gross income, and the Bidens paid 23%. The Obamas are expecting a refund of $12,334.
This article is by Tom Raum of The Associated Press.
President Barack Obama is making less money than he used to, though it's still a lot: He and wife Michelle reported income of $1.73 million last year, mostly from the books he's written, according to his tax return. That was down from the $5.5 million of a year earlier.
The president, who has been campaigning to raise taxes on the wealthy, paid the government $453,770 in federal taxes, about a quarter of the income. Just last week, he renewed his push to end Bush-era tax cuts for households with annual incomes above $250,000 -- noting that that would include him.
The White House released tax returns for the Obamas and for Vice President Joe Biden and his wife on Monday, the deadline for Americans to file.
The president for the first time drew his full $400,000 salary in 2010, since in 2009 he didn't start drawing pay until after his inauguration in late January.
Through withholding and estimated tax payments during the year, the Obamas paid $466,104 to the Internal Revenue Service. That was an overpayment, so they are getting a $12,334 refund.
The first family's adjusted gross income for 2010 was $1.728 million. Their taxable income after deductions was $1.34 million.
The average rate for top earners has plummeted from 26% to 17% since 1992, while the average rate for all has fallen from 9.9% to 9.3%. Congress is talking about cutting tax breaks, but which ones?
This article is by Stephen Ohlemacher of The Associated Press.
Stung by the income taxes you had to pay this month? You'll probably take little consolation in hearing that the superrich pay a lot less in taxes than they did a couple of decades ago. And nearly half of U.S. households pay no income taxes at all.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17%, down from 26% in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3% from 9.9%.
Inspector general faults IRS for paying out $513 million in questionable claims for homebuyer tax credit. Agency says it caught many bogus claims.
This story is by Stephen Ohlemacher of The Associated Press.
The Internal Revenue Service has paid out more than a half-billion dollars in homebuyer tax credits to people who probably didn't qualify, a government investigator said Friday.
Most of the $513 million -- about $326 million -- went to more than 47,000 taxpayers who didn't qualify as first-time homebuyers, said the report by J. Russell George, the Treasury inspector general for tax administration. Other credits went to prison inmates, taxpayers younger than 18 and people who did not actually buy homes.
"The IRS has taken positive steps to strengthen controls and help prevent the issuance of inappropriate homebuyer credits," George said. "However, many of the actions occurred after hundreds of thousands of homebuyer credits had already been issued, including fraudulent and erroneous credits totaling millions of dollars."
The popular credit provided up to $8,000 to first-time homebuyers and up to $6,500 to qualified current owners who bought another home during parts of 2009 and 2010.
It's not too late to contribute to an IRA or HSA, plus other advice to get you to the finish line on time.
If you haven’t finished your taxes -- and fear waiting in line at the post office -- you’re not alone.
In fact, this year tax season may be moving a bit slower than usual because the last-minute, year-end tax agreement delayed the usual timetable for the Internal Revenue Service to get its forms and systems ready.
"We are probably a week behind last year," says Bill Fleming, managing director in the personal financial services division of PricewaterhouseCoopers. "Everything has been pushed back a week or so."
The mad dash to the finish could cause extra problems this year because of the feds’ push for electronic filing. E-filing is now mandatory for accounting firms that do at least 100 returns a year, and there’s no precedent for how the government’s e-filing system will do under pressure.
If you’re among those who are just now struggling through your taxes, here’s a quick guide to the things you need to know now:
Financial institutions and online services provide some nifty aids for wrestling your information into submission before the April 18 deadline.
You let your taxes go until the last minute. And now you need some help.
Taxes are due April 18, come heck or high water, so if you've procrastinated, here is your one-stop shop for fast and easy tools for getting your business finances organized for the taxman.
None of these are particularly pretty, mind you, but they will get your finances in IRS-ready shape -- and fast.
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