The unwanted GoFundMe
And more of the week's best financial insight
Here are three of the week's top pieces of financial insight, gathered from around the web:
An IRS refund logjam
Taxpayers are encountering unprecedented delays getting refunds, said Laura Saunders at The Wall Street Journal. "A host of problems rooted in the COVID-19 pandemic" has led to a severe backlog at the Internal Revenue Service. The agency is "reviewing about 16 million 2020 returns, mostly because of tax changes last year and in March," while simultaneously gearing up "to send checks to millions of families" who qualify for upfront child tax credits this summer. Having to delay two annual filing deadlines last year, apply new tax-law changes, and "coordinate 470 million stimulus payments" hasn't made the IRS's job easier. Fortunately, the agency will pay 3 percent interest on "most tax refunds issued after April 15," as long as the return was filed by May 17.
Measuring housing-cost inflation
"If someone were to rent your home today, how much do you think it would go for monthly, unfurnished and without utilities?" asked Brian Chappatta at Bloomberg. It's not an easy question, but it's exactly the one asked by the Labor Department in its Consumer Expenditure Survey. Economists call the answer "owners' equivalent rent," and it makes up one-fourth of the U.S. Consumer Price Index on its own. This "could have significant consequences for reported inflation statistics and monetary policy." Homeowners can be slow "to adjust their expectations for a hypothetical rental price of their home" as the housing market rises. Last month, owners reported their equivalent rent increased 2 percent from a year earlier. The median price for a single-family home, on the other hand, rose 16.5 percent.
The unwanted GoFundMe
"Setting up a GoFundMe without the knowledge or permission of a friend or neighbor or co-worker should be avoided in most, if not all, instances," said Quentin Fottrell at MarketWatch. Consider this story of a person who was in a terrible accident that left them comatose in the intensive-care unit: Friends started a GoFundMe to pay the expenses, and soon "it was up to $15,000 and over 300 friends, even strangers, had contributed." Unknown to the donors, however, "most of the expenses" from the hospitalization were covered by insurance. The patient had also recently inherited almost $1 million from a relative. If something like this happens to you, tell your friends you appreciate what they did for you, but refund the money.
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.