Last year California delayed their tax refunds because they simply ran out of money to pay them. This year problem is going to be much more widespread.
As New York weighs a potential delay, two other cash-strapped states, North Carolina and Hawaii, have already announced they will put a hold on refunds until June and July, respectively, allowing them to retain funds longer and cover their budget shortfalls with hundreds of millions of dollars owed to individuals and businesses.
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"The refund checks amount to money that belongs to taxpayers. They haven't given the state permission to manage it for them," said an editorial in North Carolina's News and Record newspaper. "[The state] should have anticipated and planned for shortfalls. Time is money, and the money should be returned to its rightful owners on time."
Time is indeed money. That's why I never understood why people put off filing their taxes until the last minute if they expected a refund. That procrastination basically amounts to giving the government an interest-free loan.
We have nearly two months before the tax filing deadline, so don't be surprised if several other states implement refund delays.
how much financial relies on people's behavior?
Such as procrastination, or more importantly, there are so many confusing rules with the IRS, believe me, chasing down all of the deductions, receipts if a full time job if one is running any sort of business and if you think Turbotax or Tax cut are going to catch them all or be error free for business....uh, think again.
I had an issue with a capital gains loss from 2000 (yes i was an idiot, yes I knew it was a bubble but I thought it would crash, crash, crash and did not, did not, did not...
so I got back in for some day trading and of course got seriously burned because I didn't have automatic triggers/alerts at that time!)
Anywho, I had a capital gains loss which you can continue to use indefinitely, $3k per year until it's all gone for your losses. One small problem, damn software wasn't subtracting the past years deduction from the total loss amount! I find generally that the software is something you really need to watch for loss carry forwards or spread across multiple years...
But the point being, even in the day and age of tracking your every move, your every purchase, even profiling you based on what you buy....
it's a full time job to take all of those deductions and make sure it's accurate by the rules.
Hence....well, people don't do it and of course CPA's often miss the same stuff.
i.e. behavior. This is another reason I hate tax cuts for it relies on people realizing their is one, documenting it, and remembering it for tax purposes.
Absolutely Right!
I found that my software was failing to carry forward capital losses -- and you bet I paid attention because I have capital losses carried forward all the way to the grave after last year's crash. For some reason, Congress and OMB do not understand that $3,000 is pretty meager -- hardly the same after 30 years of inflation. But whenever the question is raised, OMB and CBO wave the deficit flag and pretend anyone who has a capital loss must be rich anyway.
Frank T.
Frank T.
A humble suggestion on tax returns
I would recommend a new manner to expedite one's tax return is to write on the bottom edge the following: "I happen to own an airplane." (OK, sorry for that gallows humor!)
On a more serious note, the Alternative Minimum Tax, someone wrote about in a previous post, kicks in fully this year.
Haven't checked any updated tax regs so don't know how the Obama legislation on taxes will affect it.
eek on "flying high"
Well, firstly this guy clearly had some serious issues going on. I have a hard time believing one gets their license revoked twice plus at least one audit, even with the twists and turns of business taxes....so let's wait for the details (unless they are never allowed to come out!)
Here is a post explaining one problem with one tax code beef.
But, I'd say even worse is Obama wants to go after employers miscategorizing workers as contract instead of employees.
Well, that's all great for lower wage/skilled workers...
but in terms of very small businesses who do projects/consulting with large companies...
uh, that's not so great. In other words, they are also killing the small businesses which have small contracts, providing services, such as technical services.
I don't think we should joke about airplanes here. I'm seeing way too many horror stories and I don't have stats, but way too many stories of techies....thinking the solution to their problems is some mayhem, murder-suicide and so on. Now I have not run into the IRS and my understanding, esp. for small business is they can and do destroy people and it's really bad, (and of course the large MNCs never have such woes), so I don't know how much they can push someone over the edge...
but anyway, that said, because the technical occupations are under so much attack for arbitrage, I'm seeing an increasing number of these beyond the pale multiple homicides, murder-suicides, suicides, mayhem, spree killings, killing their whole family and on and on....
and that's sure something I do not want to encourage. It's looks like technical people are the "going Postal" of 2000's.
Sorry, but given the circumstances....
No, you're right of course, and as I mentioned, this was strictly gallows humor.
But, people have to expect this sort of insanity to take place in an insane world. When Americans, at all levels, seem so willing and able to sell out their fellow Americans (and further profit from publishing stories of their ill-repute -- more or less shoving our faces further into it), what other type of behavior can be expected.
More and more complications for less and less return.
That is the tell tale mark of collapsing societies.
I think it's fair to compare
to "going Postal" or Columbine. While the horror should be outright condemned, both of those incidents at least finally got people paying attention to the stressors. The Post Office finally made a huge amount of changes with personnel and schools, well, they still don't really have it figured out but some Progress of bullying has been happening.
But when it comes to techies, man, it's such obscene how used and abused this group is and the labor abuses are incredible, esp. considering the short career life, lower pay.