Labor Dept. Estimates $7.1 Billion in Overpayments to Unemployed

Although headlines are focusing on the thousands of Americans that are losing, or have lost their unemployment benefits, the U.S. Labor Department is reporting over $7 billion in overpayment to the unemployed. As this story from ABC News explains, the total amount of unemployment benefits paid in 2009 was $76.8 billion, compared to $41.6 billion in 2008.

Fraud accounted for $1.55 billion in estimated overpayments last year, while errors by state agencies were blamed for $2.27 billion, according to the Labor Department. The department's final report will be released next month.

Some of the overpayments likely can be traced back to the overwhelming workloads facing state employment agencies during the recession, said George Wentworth, a policy analyst for the National Employment Law Project.

"You've got a system that's been under siege like the unemployment insurance system has been for the last two years," Wentworth said. "You've got a lot of new staff coming into the system; there's been a lot of federal extensions [to unemployment insurance benefits] that have had to be programmed in and so on. There's just been a lot of change that states have had to handle. ... I just think the volume and the new staff have made the systems more susceptible to error."

Continue reading at ABC News.com…

Are You Overpaying Your Taxes?

Jean Chatzky of Oprah.com recently posted a great blog discussing taxpayers who overpay their taxes, why, and how to avoid doing so. You can find a snippet of the post below, but the full story can be read on her blog.

At this point, you might be done with your taxes. If you haven't yet dropped your envelope in the mail—or clicked the button to e-file, which is the faster method—I hope you've at least gotten the ball rolling.

But it's not too early to start thinking about next year, particularly if you have a hefty refund coming to you from 2008. I know—getting a burst of money at once is exciting, particularly in this down and out economy, but financially speaking, it's just not smart.

When you get a tax refund, you're giving the IRS a free loan for an entire year, a year that you could have had that cash stashed in an interest-baring account, where it would have been working for you, not Uncle Sam. Not only that, but this year, because of budget trouble, some states, including California and Kansas, have had delays getting refunds out. "In California, this went back to January, so filing early wouldn't have helped. Truthfully, this is speaks more to being careful in your withholding," says Sherrill Gregory, an enrolled agent in California.

The idea, of course, is to configure your withholding on your W-4 so that the amount that is withheld from your paycheck each month more or less matches your estimated tax liability. That way, come April 15 of the following year, you don't get a refund, but you also don't owe. A good way to run your numbers is by using the Withholding Calculator on the IRS website (www.irs.gov/individuals/article/0,,id=96196,00.html).

Even if you've been with the same employer for years, it's not too late to make a change, says Roni Deutch, author of The Tax Lady's Guide to Beating the IRS. "You can adjust your withholding any day of the year. But the longer you fail to adjust it, the longer you're going to be addicted to getting that refund check in April."

She's right, of course. You've come to count on that little windfall once a year, but wouldn't you rather have some extra each month to save for retirement, or pay down debt, or just make ends meet? So let's not put it off anymore. Tomorrow, when you go into work, go straight to your human resources manager (or your boss, if you work for a small company) and ask that he or she help you adjust your withholding. Then, stay on top of it, because many of life's milestones call for another look at your W-4, including marriage, divorce, a second job, birth of a child, the purchase of a home, capital gains and retirement.

Treasury Overpaid For Bank Stocks

From Breitbart.com:

A government watchdog group says the federal government overpaid for stocks and other assets from financial institutions under its $700 billion rescue program.

The chairwoman of the Congressional Oversight Panel for the bailout funds told the Senate Banking committee Thursday that Treasury in 2008 paid $254 billion and received assets worth about $176 billion.

The figures were reached by extrapolating the results of a study of 10 government transactions.

The Treasury by Jan. 23 had spent about $294 billion on more than 300 companies under the Troubled Asset Relief Program. In one bright spot, the inspector general in charge of reviewing the funds said the federal government has received more than $271 million in dividends from preferred shares obtained through the program.