It’s about time! Tax season is coming to an end and Uncle Sam can finally get off our backs — unless you’re Terrell Owens and you’ve been slapped with a $244,000 tax lien, but I digress.
April 15th has arrived and I think it’s about time we delve into this year’s tax season — by the numbers, shall we?
Americans are pretty irritated by the amount they must pay in federal income taxes, according to a Gallup poll. Fifty-two percent say that it’s just “too high” — that’s a six-point increase from 2012′s 46 percent. Breaking it down by income levels, 49 percent of Americans who earned less than $30,000 also believe it’s too high; 60 percent of Americans raking in more than $75,000 say the same.
Now the upper-income Americans, specifically, felt the pinch this tax season — federal income taxes have indeed increased for them this year.
“The top 1 percent of earners will pay an average tax bill of $525,231, up more than $36,000 from last year, according to the nonpartisan Tax Policy Center. It will surge to $670,000 for 2014 taxes,” CNBC wrote. The tax rate for nation’s elite has jumped from 35 percent in 2012 to the current 39.6 percent.
The Obamas, whose tax rate was at 20.4 percent, were actually exempt from the higher tax rates because their taxable income is lower than $450,000, according to Bloomberg. Both Michelle and Barack reported adjusted gross income of $481,098 in 2013. POTUS and FLOTUS both paid $98,169 in taxes — this includes $2,310 for Obamacare.
Now let’s talk about the fun part — refunds, baby! About three quarters of Americans get refunds, which is why, in many ways, the April 15 deadline isn’t so huge. Penalties only apply to those who owe.
As of March 28, the IRS has an issued an average of $2,381 in refunds, CNN Money reports; this is a 1.5 percent increase compared to last year. According to Hipmunk Survey (via Mashable), 45 percent of Americans will save their refund. When asked what they wish they could do with the money, 54 percent said they would go on vacation.
“While saving money may be more responsible, it isn’t very fun. This explains the discrepancy between what people want to do and what they feel obliged to do,” Mashable adds.
For those who do want to splurge, about 25 percent of Americans will blow their refund on a new car, according to GOBankingRates. “The average tax refund is equivalent to a 20 percent down payment on a $15,000 auto loan; combined with today’s very low interest rates, it is a great time to buy a car,” said GOBankingRates Managing Editor Casey Bond, Cars.com reports.
Groups that are most likely to purchase a car are taxpayers under the age of 35 (29 percent), parents (26 percent), and residents of the South (22 percent).
Surprisingly enough, the IRS still has $760 million sitting in the treasury for 918,600 people who failed to file their 2010 tax return. If no one steps up to claim this money by midnight of April 15th, the cash will become property of the federal government. Retired taxpayers and low-income earners make a large percentage of those owed money — many do not know they’re eligible for Earned Income Tax Credit.
“The Earned Income Tax Credit could be worth as much as $5,000 to a taxpayer, depending on their situation,” Fox News reports. Students who worked jobs, but didn’t meet the income level required to file, are also a population that might not have claimed part of that $760 million — they had taxes withheld and could get that money back.
California has the highest number of people owed money — 85,000 residents. New York and Texas follow with 80,600 and 57,400 respectively.
Meanwhile, as many Americans who are truly deserving of a tax refund have no idea that they’re missing out on a large chunk of cash, scam artists cashed in on $4 billion in fraudulent tax returns last year — this a 66 percent jump from the year prior. Criminals have been using other people’s personal information to file, USA Today reports.
“Thieves steal Social Security numbers in any number of ways, including from publicly available sources or workplaces. Victims include school children, prisoners, Medicaid beneficiaries and the deceased. Criminals use the information to file false returns and then pocket the refund checks, often before the legitimate taxpayers have had a chance to submit their own returns,” the paper adds.
On a lighter note, there is one thing that will ease your stress through tax season — Tax Day! This means free dinner, free cookies, and even free massages at the Hard Rock Cafe, European American Bakery Café, and Hydromassage locations, respectively. There’s plenty more where that came from! Check out News-Press’ list of generous locations and see to it that you get your much needed R&R this Tax Day Tuesday.