Fox Business Flash top headlines are here. Check out what's clicking on FoxBusiness.com.
As a 58-year-old woman on disability, Robin Short of Wallingford, Connecticut, relies on her tax refund to catch up on bills. She filed her return electronically in February, opting for direct deposit so she could get her $773 refund quickly.
Continue Reading Below
DID PUSHING BACK THE TAX-FILING DEADLINE DO AMERICANS A DISSERVICE?
She’s still waiting, as are millions of others. The IRS is slowly resuming operations after pandemic-related lockdowns, but delayed refunds are devastating some people’s finances.
TAX REFUNDS HAVE BECOME A LIFELINE
Tax refunds, which last year averaged $2,979, are the largest single infusion of cash for about 30% of U.S. families, says Fiona Greig, consumer research director at the JPMorgan Chase Institute, which researches economic issues. While many Americans use refunds to save or to pay down debt, significant numbers rely on the money to cover bills or to get needed medical care — and that was true even before COVID-19 threw millions out of work.
THE IRS SAYS CORONAVIRUS ECONOMIC IMPACT PAYMENTS CAN BE SEIZED FOR THIS REASON
Delayed refunds can lead to evictions, hunger, creditor lawsuits and health problems from postponed medical care, among other ill effects. Many households live so close to the edge that they can experience hardship when a refund is delayed by two or three weeks, let alone several months, says John Thompson, chief program officer for the Financial Health Network, which researches financial challenges facing low- and moderate-income households.
“Not everybody has got the kind of flexibility or resilience to just be able to hold on,” Thompson says.
MOST IRS OPERATIONS SHUTTERED BY THE PANDEMIC
The IRS started shutting down tax return processing centers in March, along with its taxpayer help line, local offices and volunteer assistance programs. Soon after, it focused on sending out more than 159 million payments as authorized by the coronavirus relief package. By mid-May, the agency faced a backlog of 10 million pieces of unopened mail, including paper tax returns.
People who filed electronically generally got their refunds unless those returns were flagged, commonly because of identity theft concerns or a mismatch between the information on the return and what was provided by employers or financial institutions.
GOT YOUR STIMULUS CHECK BUT NOT YOUR TAX REFUND? IRS SAYS TO EXPECT DELAYS
In Short’s case, the TurboTax software she used counted a $3,800 annual pension payment twice, as both 1099 income and as W-2 income. The IRS sent her a letter about the error and advised her not to contact the agency for 60 days while the issue was resolved. Then, the lockdowns happened.
Short says her pension and monthly Social Security disability checks don’t cover her expenses. She makes arrangements to pay overdue bills, such as her power bill, when her refund arrives. Otherwise, she says, the math of living on a low fixed income gets grim.
“Either you miss a payment on the electric bill, or you don’t get your medicine,” says Short, a former facilities manager and insulin-dependent diabetic who was severely injured when her car was hit by a drunk driver.
USING REFUNDS TO CATCH UP
Putting off bills, then using tax refunds to catch up, is a common practice among strapped households, Thompson says. A survey of people who used free filing methods for lower- and moderate-income taxpayers last year found roughly half said they needed their refunds for bills, rent, groceries and other everyday expenses, according to Prosperity Now, a nonprofit that promotes financial security.
CORONAVIRUS COULD CAUSE NEW YORK TO RAMP UP AUDITS OF WEALTHY TAXPAYERS
People also increase their health care spending significantly after refund checks arrive. A 2018 study of 1.2 million checking account holders found health care spending rose 60% in the week after people received refunds, indicating many were catching up on care, Greig says.
It’s not clear how long it will take the IRS to address the backlog or when taxpayers can expect their money. People can try using the “Where’s My Refund?” tool on the IRS site or call the taxpayer help line, but getting through to a human is difficult even in normal times. Congress has cut the IRS’ budget by 20% since 2010, leading to a 22% reduction in staff, according to acting National Taxpayer Advocate Bridget Roberts. Without adequate staff, the agency answered less than one-third of its calls last year. Another option is to contact the Taxpayer Advocate Service, which has representatives in each state.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Rather than wait for the IRS to return their money each year, taxpayers can adjust their withholding so they get more money in their paychecks. But many don’t feel comfortable changing their withholding in case they wind up owing big sums, Thompson says.
“You’d have to predict how the year is going to go,” Thompson says. “And what could we possibly predict about this year?”
CLICK HERE TO READ MORE ON FOX BUSINESS
"wait" - Google News
June 30, 2020 at 12:06AM
https://ift.tt/2ZncvKQ
Some taxpayers face a desperate wait for refunds - Fox Business
"wait" - Google News
https://ift.tt/35qAU4J
https://ift.tt/2Ssyayj
Bagikan Berita Ini
0 Response to "Some taxpayers face a desperate wait for refunds - Fox Business"
Post a Comment