Some States Delaying Tax Refund Payments

(CBS)  Some states suffering severe, recession-induced budget problems are holding off on paying tax refunds to people and businesses.

North Carolina, Hawaii and Alabama are already doing it and others, such as New York and Kansas, might.

The states are holding or may hold onto your money as long as they can because they need to use it for other purposes, tax expert and attorney Barbara Weltman told "Early Show" Saturday Edition" co-anchor Chris Wragge.

You'll eventually get your refund, but when depends on where you live, she explained. Laws differ from state-to-state, but most states have to issue a check (or direct deposit) within 45 days from April 15 or the date the return was filed, whichever is later. So, if you filed your return in February, the refund isn't due until 45 days after April 15. Some states have even longer — up to 90 days — to issue the refunds without having to pay interest.

Weltman, who wrote "J.K. Lasser's 1001 Deductions & Tax Breaks 2010" (Wiley), says she sees this becoming a long-term problem because, even if the economy recovers, many states will have huge leftover budget gaps.

"I think the best strategy for tax payers is to avoid the need to get a refund — which is really just an interest-free loan you've made to the government," she observed.

That means lowering how much you have taken out of your paychecks for taxes, and getting that money up-front, upping your take-home pay but shrinking or eliminating your refund, so you're not waiting for the government to issue the refund check.

Other ways Weltman says you can try to avoid being subject to the refund delays:

• If you're owed a refund, file as soon as you can. The states will likely process refunds in the order the returns came in. The sooner you file, the faster you'll get your refund, even with delays.

• Follow changes in tax laws enacted during the course of the year, on both the federal and state levels, because they could impact your withholding. For example, we may have a federal jobs bill soon, and it's almost certain to contain tax breaks.

• Work with a tax professional. He or she will help you stay abreast of what's happening and make sure you're not overpaying your taxes.

[meincalifornia]

irs re: 3/13 sting at the volunteer tax prep location/s. why can you entrap by witholding paperwork and get/ting away with it. if the tax preparer would have missed it...there would have been consequences. our customers don't come in to entrap. they come in to have their taxes done and give us ALL received/in possession paperwork. unlike you/r witholding/hiding paperwork to entrap. choose another entrapment method/scheme. this one stinks.

[californiadreaming]

States have no right to do this unless they pay a penalty and interest to us in return. If I am 1 minute late with 1 cent of tax owed, I get penalties and interest and taken to the cleaners. If I overpay, I risk (in California) getting a pretty moronic IOU with no penalty or interest paid to me. Sorry, but it's wrong!

I am self-employed so I pay quarterly estimated taxes. States have computers that run all day long to see if I am ever in arrears. Yet they think that it's OK for them to stiff me if I pay them too much.

[mitch0927]

This is fine with me, but it seems as if we are late paying them we have to pay a penalty. The tides are now turned and if they need to hold on to it for a period of time, we should get paid a penalty, don't you think?

[book_of_wally]

No that would only make the problem worse.

[jgg000101]

coupled with this, here is what is really disturbing to me:
citigroup informed it's customers maybe a week and a half ago that they were changing their transaction policy. Now, they are able to withold the release of any customer funds on all acounts, whether they be checking, savings, cd's, ira's, etc. I'm not saying they are going to do it, but this allows them the possibility to say "no" if at some point you wanted to withdraw your own money. Now, the reason I am bringing this up is that I was at my bank yesterday, Cal National which is now U.S. Bank, and they had a sign saying the same thing. The only reason I can think of for them doing this is that they are protacting themselves from any run on banks. Look to see if anything like this happens at your banks.

[curse914]

This was bound to happen.

jgg000100, I know I jump on your crap often brother, but in the end we all suffer. It is not only up to me to think critically about my adopted ideology, you have to also.

We lack all of the foundations that FDR had when we came out of the Depression.

1) we are not dependent of OPEC for our oil needs. We only have 70 billion in actual proven reserves. We consume 7.5 billion a year, that would be about 6 years of energy autonomy and we would have very little oil reserves left. Oil is not just used for fuel, it is used in a vast number of products that would also dissapper.

2) FDR re-regulated the Financial Sector. Obama has not done this; either he is hamstrung or he is one of the corporatist who allowed Deregulation of the Financial sector to ravage our economy.

3) NAFT and CAFTA like "Free Trade" laws that have forced us to compete with nations that have zero labor, product safety and environmental laws. God, this should not be a partisan issue. Both sides support this absurd economic strategy. So either they do not understand economics or they are obsessed with short term gain at the expense of the survival of our nation.

[curse914]

typo: should have read "we are now dependent on OPEC."

[culturechang]

This is not legal, but the govt never complies with the law. This is not thier money to keep. Legally it is the tax payers.

[scottyusa]

No problem as long as the states include and interest or penalty for paying late. Just like we would be charged if we paid late.

[tmittelstaed]

saucymugwump wrote:

"...The housing bubble, by itself, would not have precipitated the current panic. The panic was created by Wall Street selling credit default swaps without sufficient backing; by Wall Street packaging subprime mortgages and selling them as AAA securities, i.e. fraud..."

Saucy this isn't true because if Wall Street WASN'T misrepresenting those subprime loans by bunding them in securities, then nobody would have bought them and the money would then not have been available to the banks to make further subprime loans, and the bubble never would have happened, or it would have died out before it got big.

The actual truth is that your asking a chicken-and-egg question, trying to assign blame to the banks, and not to the people out there flipping the homes. In truth, the banks knew what they were doing, the flippers knew what they were doing, both worked in a symbiotic relationship and both hoped that the game of musical chairs would never end. The flippers who caused the bubble are just as much at fault, and couldn't have existed without the subprimes - yet the subprimes couldn't have existed without flippers ready to take out those kinds of loans.

[curse914]

That is not entirely true unless all knowledge was equal.

There were many smaller "flippers" jumping on board in the end whom probably had no idea even what a bubble is. These day trader like flippers were enticed by the concept that was marketed vigorously that your house is an investment that will continue to increase in value exponential and eternally.

It is no different in my mind than the concept of perpetual growth that our entire economy is predicated on. Not only is the theory of a unregulated markets policing themselves a fallacious self serving lie, so is the idea that an economy can grow infinitely within the confines of a nation, continent and ultimately the planet. Soon enough, the lie unravels and leaves devastation in its wake.

[askagain]

jimispod - Many people would do not accept the truth when it stares them in the face. You are correct that government policies and regulations caused the housing bubble which led the rest of our economy to crash. For those who scream for government regulation, all of this happened as a result of government regulation. Their answer, of course, is to give us more government regulation. This sounds like convoluted thinking.

[curse914]

Jesus H Christ, I put data that counters this argument just below and you intentionally ignore it. You do understand percentages, right?

Are we a Nation or not? Can we agree on anything? Because I am getting to the point where I do not care. When this nation bleeds out from a thousand cuts, it will not be my blood that is spilled exclusively, we will bleed together.

Obama has done nothing to re-regulate the financial sector. All the "growth" in the Stock Market has been in the Financial Sector. It is bubble time all over again, but this time, their will be no pretense of recovery. The Government "stimulus" is the last bubble. Progressives and "fiscal conservatives" alike need to face this hard truth.

] snip [

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and

[jgg000101]

curse, of course private companies wrote the subprime loans. It was the government that implemented the plan and these sleazeball "entrepreneurs" saw a gap to shoot. The money was flying around and I'm sure many of our politcos were sucking up lobsters and cristal.

[curse914]

by jimispod March 13, 2010 10:34 PM EST
I guess you missed that part about TAXES?

Maybe you should look at Chain's ZERO% capital gains tax for starters. Generally speaking cost of capital and cost of labor are the 2 biggest expenses for any business. Especially for small businesses that generate most new jobs. Try a refresher in ACCT101.

================

The marginal tax rate today is 35 percent. It was 50 percent during the singe wage earner 1950's and 60's.

What you are doing is called scapegoating. You refuse to acknowledge that it could be deregulation that has rended our economic foundations asunder. And honestly, I have no idea why. The only thing that I can think is that you are so rabidly bipartisan that you would rather pluck your eyes from there sockets than have to deal in rational discourse with your perceived "enemies."

Your zealotry is frightening.

[tmittelstaed]

I have an idea why. It's because he's ignorant and can't use his brain and it's easier to parrot Limbaugh than to look it up. What you really should be asking is how Limbaugh, who certainly does know better, manages to sleep at night when he knows he's lying to his listners all day long, just for money.

[jgg000101]

wait'll the responsible working stiffs start delaying their property taxes and estimated income taxes. Since people who are expecting a refund have ostensibly made a 1 year interest-free loan to the government, why aren't they paid interest on the delayed months? If china were lending the government the money china would never stand for this. china wouldn't care if the money was being taken away from welfare recipients, food stamp recipients or the public school system. They'd want their money. why should people who have actually paid more than their fair share get skarooed?

[curse914]

When the government starts to unravel you will have your Feudal Nation States that you opine for, and you can hunt down the intellectuals and "liberals". That way you can do "gods work" and cleanse the earth of free thinkers who may challenge these newly formed theocracies whose bloodshed will be for "the greater good."