5 things to know about Tax Day: refunds are up, audits down

Caption Bill Wimbiscus

Caption Bill Wimbiscus

While today, April 18, is the official deadline for tax returns and FBARs, the US government grants automatic extensions to overseas residents - so for Americans residing in Cayman, the "actual" deadline for filing tax returns is June 15 (an additional extension until October 15 can be applied for), and the deadline to submit FBARs isn't until October 15. It's too bad filing taxes wasn't an easier process. Tax reform must also encourage investment in domestic manufacturing, production, and employment to ensure a robust manufacturing sector. But tax season also generates about $300 billion in refunds, a significant boost to the USA economy.

WASHINGTON (AP) — Tuesday is Tax Day, that dreaded day when millions of procrastinators rush to fulfill their civic duty by filing state and federal tax returns. That is to say: Taxes have been increased by $735 million a year and cut by $2.9 billion a year. If you are not finished by tonight, you can file an extension that gives you more time to file, not more time to pay.

The number of people audited by the IRS in 2016 dropped for the sixth straight year, to just over 1 million.

You don't need Donald Trump's tax returns to know that we need a more just tax system, one that calls upon the wealthy and corporations to pay their fair share. With that in mind, here's a discussion of the three main types of taxes, and why the US doesn't use a flat tax system.

The IRS blames budget cuts as money for the agency shrank from $12.2 billion in 2010 to $11.2 billion previous year.

But rich people beware.

The top rate that the highest-income Americans will pay on most capital gains is 20 percent, around half the top marginal rate for ordinary income.

When the GOP starts talking tax reform, the Democratic Party should demand that the conversation begin with a 91 percent tax on all income over $10 million. The tax breaks are geared to benefit the working poor, and many families claim both. The attack on the Affordable Care Act is just the start of tax clawbacks. But a new law required the IRS to delay tax refunds for people claiming these credits until February 15.

The delay was created to give the agency more time to screen the returns for fraud. Throughout the tax filing season, the number of tax returns processed by the IRS has been lower than a year ago.

As of April 7, the IRS had received 104 million tax returns and processed 101 million. For all respondents, the poll has a credibility interval of plus or minus 3.5 percentage points.

There is a common myth that people in the US illegally don't pay taxes.

Global growth is looking up, says International Monetary Fund , but major risks remain
They also expect President Donald Trump to deliver tax cuts and infrastructure spending that could help boost USA economic growth. Global trade has fostered "economic miracles" around the world, driving growth and lifting millions out of poverty, he stressed.

Yes, some work in the underground economy. But in 2015, the Social Security Administration estimated that immigrants who are in the USA illegally paid $100 billion in Social Security payroll taxes over the previous decade. With very few exceptions, almost every American pays some taxes one way or another.

How does Social Security know when it receives taxes from immigrants who are in the USA illegally?

Some of these are clerical errors or unreported name changes.

In a nutshell, it's the general consensus among USA citizens and politicians of all age groups, income levels, and political affiliations, that the wealthy should pay more into the system than the poor.

However, people who make tens of millions of dollars often make their money through investments, which are taxed at much lower rates, and these people really do pay lower rates. The penalty is a percentage of what you owe. If you owe nothing, there is no penalty. If you know you couldn't help but spend the money irresponsibly instead of letting it earn interest, it might make sense to let the government hang on to your money for you until a later date.

If you're knee-deep in tax-related turmoil, take a deep breath and resist the urge to panic.

The failure-to-file penalty is generally 5 percent of your unpaid tax bill for every month, or part of a month, you are late. It kicks in on April 19.

We also pay the seventh-highest tax on beer, 17th-highest wine tax and 27th-highest liquor tax - but still the sixth-lowest cigarette tax. That's because the IRS wants you to file a return even if you don't have enough money to pay your bill. If you would like to discuss another topic, look for a relevant article.

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