The Federal tax refunds are running behind
Tax refunds are supposed to be coming soon, and everybody obviously enjoys those wonderful little checks. However, this tax season isn’t going as planned since the amount of tax refunds is lagging.
The IRS isn’t exactly showcasing any numbers on how many federal tax refunds have been issued so far this tax season, but we know that refunds have gotten off to a bumpy start so far.
The stars simply aligned perfectly for a lag in federal tax refunds. There was a late launch to the start of the filing season, as it started on January 30, which is 8 days off of the normal start date. This happened because of a last minute, fiscal cliff tax change that got the green light by Congress. There was also the inability of taxpayers to file for credits until early March, in addition to the time-consuming analysis of tax returns. This was due to the IRS trying to improve on their efforts to filter out identity theft and tax refund fraud.
Even big companies like Wal-Mart are feeling the late start to the tax refunds. This time last year, Wal-Mart cashed out about $3 billion worth of checks that were related to tax refunds. Currently, that amount is just $1.7 billion.
Tax professionals have noticed many disappointed tax filers who can’t file their taxes yet or whose refunds are taking longer than usual to arrive. The process of the tax refunds is picking up a bit, but it still isn’t back to normal.
Categories: Federal Tax, Income Tax, State Tax Tags: federal income tax, federal tax refund, income tax, tax, tax credits, tax refund
Federal tax code may favor driving over other transportation modes
There are common complaints that transit is subsidized and roads pay for themselves; however, this is found over and over again to be untrue. Taxes are due in less than a month, and the Tri-state took a peak at the available and recently-expired tax credits and deductions that are related to automobile and transit use in the federal tax code. They did so in order to see if the tax breaks being proposed had a bias towards automobile use over other transportation.
It is possible that the federal tax code provides benefits for automobile owners; however, it seems as they offer limited incentives to taxpayers that take transit or travel by bike. This article isn’t meant to be an expert analysis on taxes, as we aren’t tax advisers, but it may be an optional guide or simply seen as an educated opinion.
If you own or operate a vehicle, these are some of the benefits you may earn:
Tax payers who choose to donate their vehicles to charity can receive a tax deduction
Individuals who have experienced an automobile crash that aren’t fully reimbursed by the insurance of the other driver, as long as the crash wasn’t the individual’s fault, may be able to deduct the unreimbursed amount.
Automobile owners may also receive tax credits to purchase or lease fuel efficient vehicles or even fuel cell vehicles and hybrid vehicles. Additionally, individuals may take a tax credit for qualified fuel cell vehicles that were serviced in 2012.
Also, individuals that drive to work may be eligible to take up to $245/month in a pre-tax deduction in order to cover parking expenses.
Categories: Federal Tax, Income Tax, Tax Law Tags: federal income tax, federal tax, gasoline tax, income tax, sales tax, taxes
FAFSA Tax Return Delays
The IRS seems to be causing more trouble than simply slowing down federal tax refunds, as there is a delay in processing forms 8863, Education Credits. The Department of Education formally addressed the delay this week, and it was referred to as a technical error due to a limited number of federal tax filing software. This delay affected hundreds of thousands of taxpayers that included many who have filed with H&R Block.
This glitch has added weeks onto the processing times for tax returns that are usually submitted and processed by mid-to-late February, making it rather difficult for some students to submit their FAFSA on time, which is Free Application for Free Student Aid.
Every year, millions of students submit a FAFSA, hoping to secure financing for college; this includes available grants and in many cases, loans. For the 2011-2012 FAFSA year, there were over 20,000,000 applications that were submitted, in which one third of them were submitted within the first quarter.
Students are not required to wait for their federal tax return to be processed by the IRS in order to complete and submit the FAFSA application. All of the information can be entered manually onto FAFSA, instead of using the FAFASA/ IRS Data Retrieval Tool that automatically populates the form with data from the IRS. The Department of Education is recommending that students file complete application as soon as possible. In addition, they can collect paper copies of those tax returns and make any FAFSA corrections.
Categories: Federal Tax, Income Tax, State Tax Tags: corporate tax, federal income tax, federal tax, income tax