Federal Budget Deficit Hits April Record

The U.S Federal budget deficit last month reached $82.7 billion, the highest amount ever recorded for the month of April. This is up drastically from last years April deficit of only $20 billion. According to the Associated Press, the number was above the $30 billion deficit private economists had been forecasting.

The government normally runs surpluses in April as millions of taxpayers file their income tax returns. However, income tax payments were down this April, reflecting the impact of a severe recession which has pushed millions of people out of work.

Are You Finding Difficulty Coping During Tax Time? Seeking Mental Health Counseling Can Help With More Than You Know.

April is National Stress Awareness Month and I thought I’d take a moment to give you some tax-stress relief advice.

Whether you will owe taxes or get a refund, filing a return, even if you cannot pay right now, is critical. Seeking out psychotherapy could also help. Not only to deal with your stress, but to establish and validate the genuine mental disability that can be caused by a catastrophic event or life change.

The IRS often makes allowances for people in difficulties, but takes a dim view of those who don't file. Last year the IRS assessed more than $6 billion in civil penalties against taxpayers who failed to file. Penalties for non-filing can be up to 25 percent of tax due, but they may be reduced or eliminated when evidence of treatment for a mental illness constituting a 'reasonable cause' for non-filing can be shown. Even if years have passed without filing, the IRS may consider abatement when shown proof of treatment.

Remember to take a deep breath and know there are options to get through this difficult time.
See more articles about stress and taxes here on my blog.

Obama: People Should See Tax Cut Help By April 1

From The Star Tribune:

The latest: President Obama said Saturday that most Americans will start seeing the benefits of the new tax cuts by April 1. "Never before in our history has a tax cut taken effect faster or gone to so many hardworking Americans," Obama said in his weekly address. In tandem, the Treasury Department began directing employers to reduce the amount of taxes withheld from people's paychecks as soon as possible.

His address: Obama said he was grateful to Congress, governors, mayors and all the people who supported the $787 billion economic stimulus measure, which including both tax cuts and new spending. Still, he added: "It is only a first step on the road to economic recovery. And we cannot fail to complete the journey." He said the country also must stem foreclosures, repair the banking system and revamp financial regulations.

What to expect: The tax credit -- up to $400 for individuals and up to $800 for married couples -- will be doled out through the rest of the year through a payroll tax cut reflected in paychecks. Most workers should see about a $13 per week increase in their take-home pay. But the credit is phased out for higher-income taxpayers. People who do not earn enough money to owe income taxes can file for their share.

New details: The IRS released new withholding tables on its website (www.irs.gov) to help guide employers in reflecting the new credit. It says more instructions about tax provisions in the law will be available soon and will be mailed to more than 9 million employers next month.