IRS will start the tax season with backlog
The Internal Revenue Service will kick off the approaching tax season with a backlog of at least 10 million unprocessed returns from last year, according to a new report by the national taxpayer advocate. The pile of returns remaining are from the “most challenging year taxpayers and tax professionals have ever experienced,” the advocate, Erin M. Collins, wrote in her annual report. The backlog is a far higher number than the unprocessed returns the IRS typically faced before the pandemic began. The IRS warned taxpayers that staffing shortages and backlogs would translate into another frustrating filing season, which begins Jan. 24 and runs through April 18 (in most states).
Pay on Wall Street will surge after year of record profit
JPMorgan Chase reported record profits for the year Friday, and Citigroup’s annual profit more than doubled. But both banks said the costs of doing business were going up: Higher compensation curbed their final quarterly earnings of 2021. JPMorgan, the country’s largest bank by assets, posted a record $48.3 billion in profit in 2021, but its profit in the three months ending in December fell 14%, to $10.4 billion, from the same quarter in 2020. Like JPMorgan, Citigroup reported lower fourth-quarter profit, sliding 26% to $3.2 billion but still exceeding analyst forecasts. For the year, profit nearly doubled, to $21.9 billion.
China’s 2021 trade surplus hits a record yearly high
All over the world, families finding themselves with more time at home because of the pandemic have responded by buying more goods made in China. Those purchases pushed China’s trade surplus to its highest level ever last year, according to data released Friday by the Chinese government. The country’s surplus in December also shattered by a wide margin the record for the highest single month, set only two months earlier. China’s trade surplus reached $94.5 billion in December, breaking the record of $84.5 billion, set in October. The country’s trade surplus for all of last year climbed to $676.2 billion.
Navient reaches $1.85B deal to settle claims of predatory behavior
Navient, once one of the country’s largest student loan servicing companies, reached a $1.85 billion deal with 39 states to settle claims that it had made predatory loans that saddled borrowers with debts they were highly unlikely to repay. The deal, announced Thursday, requires Navient to cancel $1.7 billion in delinquent private student loan debts for nearly 66,000 borrowers and pay $95 million in restitution. The loans were crucial to Navient’s ability to make a large volume of federal loans, prosecutors said. Most who took out the loans that will be forgiven under the settlement attended for-profit schools that often have low graduation rates and poor job-placement records.
Housing costs swell, hampering homebuyers and pushing up rents
Housing costs jumped last month, as higher prices continued to constrain aspiring homebuyers and push up the demand for apartment and home leases. Rent costs rose 0.4% in December, according to government data released Wednesday, helping to drive the consumer price index up 7% in the year through December. Rent and “owners’ equivalent rent” make up about a third of the index. Several factors have contributed to the surge, including that many would-be homebuyers found themselves on the sidelines as housing prices rose steeply during the pandemic. This kept more people in the rental market, leading to increased desire for rental apartments, homes and condominiums.
