Senate Narrowly Passes First Budget in Four Years
So finally, the Senate passes a budget. (Wall Street Journal) How is it possible to run a country without a budget? Well, simple really, the government doesn’t have to play by the same rules you and I do. Can you imagine if you just didn’t keep track of your finances for four years? Just continue to spend like there was no tomorrow and if you felt like you were getting too deep in debt, just announce that you are going to extend or raise the amount of debt you are going to have?
The U.S. Senate narrowly passed the budget. Do they ever pass anything with everyone in agreement? I doubt it. The budget plan was passed by a 50-49 vote in the Democratic-controlled chamber. Four Democratic senators facing tough re-election campaigns in 2014 joined all the Senate Republicans in opposing the measure, which seeks to raise nearly $1 trillion in new tax revenues by closing some tax breaks for the wealthy.
I’m a bit confused as to how the government method of accounting works. They’re going to raise $1 trillion by closing some tax breaks, OK, I guess I buy that, although I think it is more speculation than fact. But I recently heard the president say that by increasing the debt ceiling to $16 trillion instead of $18 trillion he has reduced our National debt by $2 trillion.
…What?
Congress will be out of town for a two-week spring recess.
I guess after three months of work, Congress is worn out and needs a little va-ca. I guess passing a major tax increase, raising the federal debt limit, allowing $85 billion in spending cuts to take effect and enacting a bill to keep the government operating only through Sept. 30, really takes it out of you.
This budget mess is not over. It still needs to pass the house and we all know that it is not going to be that easy. With the Democrat controlled Senate and Republican controlled House, it seems like nothing ever gets done. Well, nothing of any importance. If there is a spotted, ring-neck, hootie bird spotted in a field in Whocares county in the state of Ridiculous, they have no problem agreeing that there should be millions spent of studying it and determining why it will only crap when it is facing north. …or some such nonsense.
The problem is that each side has a different view on how our country should be run. The Democrats, keeping up the stereotype, seem to be all about tax and spend and “entitlement” programs with no regard for a budget, whereas the Republicans appear to be for a smaller government and controlled spending.
The House wants a balanced budget by 2023
The House plan ostensibly brings the government’s taxes and spending into balance by 2023 with cuts to domestic spending even below the levels of automatic across-the-board cuts roiling federal programs now, and it orders up dramatic and controversial changes to Medicare and the tax code.
The Senate plan, by contrast, includes $100 billion in upfront infrastructure spending to bolster the economy and calls for special fast-track rules to overhaul the tax code and raise $975 billion over 10 years in legislation that could not be filibustered. Even with that tax increase and prescribed spending cuts, the Senate plan would leave the government with a $566 billion annual deficit in 10 years, and $5.2 trillion in additional debt over that window.
As if all of this isn’t enough to make your head explode, coming this summer… Congress must again raise the government’s statutory borrowing limit or risk defaulting on the federal debt. …The good ole Debt Ceiling problem is coming back.
So the Senate passed a budget, the first in 4 years, but guess what? It will never be passed into law as it is. …and no one seems to every compromise.
I think it’s better for me to just stick my head back in the sand and stop watching the news.
…I have had just about enough.
H&R Block Snafu Delays Refunds
…mandatory field on tax form left blank
Marketwatch.com — H&R Block, the nation’s largest tax preparer, confirmed that its software failed to fill out a mandatory field on Form 8863, which is used to claim educational credits. The IRS would not say what percentage of the roughly 600,000 faulty returns came from H&R Block (US: HRB), but the company received thousands of complaints on its Facebook page and on Twitter.
I have to tell you, I would be pretty mad if this had happened to us. My wife and I used TurboTax to prepare and file our tax return; we have for the last 5 years or so, and have never had a problem. I used H&R Block when I was younger and all I remember was an expensive “loan” in order to get my return immediately. I thought the days of those short term refund loans were over but they are not. Now there is what is called a RAC / RAL or Refund Anticipation Check / Loan.
RALs are those short-term loans usually at outrageous interest rates, for the amount of an expected refund. Tax prep fees are usually deducted from your return amount also. A “good” RAL might have an APR of 40%; a bad one can end up costing 10 times that much.
When combined with other the cost of the RAL can approach loan-shark levels.
Thankfully, this might the last year people need to be warned about RALs. That’s because the RAL industry is getting squeezed by federal regulators, who are cutting off bank funding to the biggest RAL lenders, and by the Internal Revenue Service, who is making it easier to get refunds quickly and without crazy fees.
You know, what’s really problematic is the fact that you have to pay H&R Block something like $150 for 30-40 min of time with their “tax consultant”. If I’m paying for an “expert” to prepare my taxes, I would expect there to be no errors. I realize the “tax consultant” is a human, prone to making mistakes, but this goes farther than the individual tax preparers, the fault falls on H&R Block for failing to stay up-to-date with the IRS and failing to properly train their “tax consultants”.
H&R Block explained that a form had changed, Form 8863 relating to student tax credits, and that in previous years, five lines on the form could be left blank for a “no” answer. Starting this year, preparers must enter an “N” in those fields or risk a delay.
H&R Block said it learned about the tax form change after it had submitted hundreds of thousands of tax returns. The IRS said it was aware of the problem and it is continuing to review the situation and work with “affected software companies to assist in the processing of those tax returns.”
You know, I was always instructed when filling out any form, to never leave a “blank”. If it’s a “no” answer, mark it “no”. If something doesn’t apply, use “n/a”. You would think that H&R Block’s highly trained tax preparers would follow this thinking just from common sense, especially if you are dealing with the Government.
I feel sorry for Mr. & Mrs. John Q. Public who filed their tax return and is expecting their refund only to find out it’s going to take at least 21 days for the IRS to figure everything out and issue the refund.
Now, my good friend TurboTax is not exempt from errors either. Last week, the Minnesota Department of Revenue warned taxpayers against using TurboTax to file their state income taxes, finding 10,000 returns had problems. In a terse statement, the Minnesota Department of Revenue said it would stop processing tax returns filed through Intuit (the company that operates TurboTax) if the problem is not fixed.
Well, I don’t live in Minnesota so it doesn’t affect me but if I did, I wouldn’t be as upset with TurboTax since I know full well that I am filing my return on my own with the help of a computer program. There’s not a $300 an hour “Tax Consultant” using their knowledge and expertise to make sure my return is done correctly.
If you want to insure your taxes get prepared correctly, seek out an Accountant or Bookkeeper certified to prepare tax returns.
… Often times you get what you pay for.
DEBTHELPER.COM 