Business

If you’re waiting for a tax refund, it may be accruing interest, and the rate jumps to 7% from 6% in January.
The IRS adds interest if it takes more than 45 days after the filing deadline to process your return and send your refund.
The new rate also applies to unpaid balances, making tax debt more costly, experts say.

Bill Oxford | E+ | Getty Images

If your tax refund is still in limbo, there’s good news: Your balance may be accruing interest, and the rate increases to 7% from 6% on Jan. 1, according to the IRS.
As of Nov. 18, there were 3.4 million unprocessed individual returns received in 2022, including filings for previous tax years, the agency reported.

related investing news

These assets have yields not seen in years — here’s what to know about preferred stocks

Adjusted quarterly and tied to the federal short-term rate, the 7% interest applies to pending refunds and unpaid tax balances.
More from Personal Finance:Why long Covid could be ‘the next public health disaster’Why using buy now, pay later for holiday gifts is ‘horrible’Key things to know before rebalancing your portfolio
“It’s a big jump,” said Sheneya Wilson, a certified public accountant and founder of Fola Financial in New York, noting the rate has more than doubled since January, when it was 3%.
Typically, the IRS has 45 days after the tax-filing deadline to process your return and issue a refund. After that, your “overpayment” starts to accrue daily compounding interest.
Although 7% interest is more than you’ll earn from savings accounts or the new rate for Series I bonds, there’s a downside — IRS interest is taxable.

During the fiscal year 2021, IRS interest payments grew to $3.3 billion, a 33% increase from 2020 for individual returns, the U.S. Government Accountability Office reported in April.

What to do if you can’t pay your tax balance

While 7% interest is a small boost if you’re still waiting for a tax refund, the new rate also makes unpaid balances more costly, Wilson said.
“You never want to be negligent when it comes to the IRS,” she said, explaining there are penalties on top of the interest that accrues after the tax deadline.
The late-filing penalty for federal taxes is 5% of your unpaid balance per month or part of a month, capped at 25%, and the late payment fee is 0.5%.

You never want to be negligent when it comes to the IRS.

Sheneya Wilson
Founder of Fola Financial

However, if you’re wrestling with a sizable tax balance, you may have options, Wilson said.
With a balance of $50,000 or less, including tax, penalties and interest, you can set up an installment plan online, but you’ll have to call the IRS for larger amounts, she said. However, you’ll still accrue penalties and interest until the balance is paid off.
Another option, known as an offer in compromise, may allow you to settle for less than you owe if you have gone through some type of financial hardship, Wilson said. “Usually they’re going to request a down payment but the remaining balance can still also be paid over time,” she said.

WATCH LIVEWATCH IN THE APP More

Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Wednesday’s key moments. Fed Chair Powell to speak Defensive growth stocks Alphabet’s high costs 1. Fed Chair Powell to speak Stocks were mixed Wednesday ahead of a highly anticipated speech from Federal Reserve Chair Jerome Powell that could shed light on the central bank’s strategy to fight inflation. However, we suspect Powell won’t fully know the Fed’s interest rate hike trajectory until the release of monthly U.S. employment data on Friday. The bank is unlikely to fully cease raising rates regardless, but there’s a chance it could take a more dovish approach at its next meeting on Dec. 13-14. Wall Street largely expects the Fed to raise rates by 50 basis points next month, less than the 75-basis point hike from November . 2. Defensive growth stocks We continue to like defensive growth stocks that can weather a recession, rather than tech stocks that have been battered by rising interest rates and could fall further. Some stocks that we recommend in the Club portfolio as dependable plays include Johnson & Johnson (JNJ), Procter & Gamble (PG), Constellation Brands (STZ), Honeywell (HON), Morgan Stanley (MS) and Wells Fargo (WFC). 3. Alphabet’s high costs Mizuho lowered its price target for Alphabet (GOOGL) to $135 from $140, arguing that the Google parent’s 2023 operating income estimates are too high. We believe that tech companies like Alphabet need to align their expenses with revenue growth, which has come under pressure amid gathering macroeconomic headwinds. Analysts at Mizuho are correct that Alphabet’s estimates are too high — and we think reducing headcount could help pad the company’s earnings. (Jim Cramer’s Charitable Trust is long JNJ, PG, STZ, HON, MS, WFC, GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

Delta is clamping down on access to its airport lounges starting next year.
The airline is raising the prices for lounge access memberships and adding other restrictions.
Some travelers have encountered long lines to get into clubs.

The Sky Lounge during a tour of Delta Air Lines Terminal C at LaGuardia Airport (LGA) in the Queens borough of New York, on Wednesday, June 1, 2022.
Stephanie Keith | Bloomberg | Getty Images

Delta Air Lines is making the most exclusive corners of the airport harder to get into.
Next year, the airline will increase the prices and requirements to gain access to its Sky Club airport lounges, spaces designed to offer flyers an escape from the traveling masses with complimentary food and drinks, workspaces, comfortable seats, and couches. Sometimes, even showers are available.

Delta’s move comes after complaints from travelers about long lines and crowds at some of the Sky Clubs, as entrants to the spaces have increased through credit card deals, customers’ travel habits and lounge memberships.
Starting early next year, membership packages for Delta’s lounges will only be available to members of the airline’s SkyMiles frequent flyer program who have status, one of the so-called Medallion tiers. Currently, anyone can purchase a membership.
“We want to invest in our customers who invest in us,” Dwight James, Delta’s senior vice president of customer engagement and loyalty, told CNBC.
James said feedback from passengers has shown they want to avoid stressful crowds and lines at the airline’s lounges.
“It’s not representative of the experience they’re accustomed to,” he said of the recent crowding. James added that some of the most crowded lounges have been at hub markets such as New York and Atlanta, and that Florida has also been busy.

“We have to evolve,” James said.
Among other changes: Delta is raising membership fees. Starting Jan. 1, the price of an individual membership to Delta’s Sky Clubs will increase from $545 or 54,500 miles to $695 or 69,500 miles. Executive membership, which includes guests, will rise from $845 or 84,500 miles to $1,495 or 149,500 miles.
Delta offers its Diamond Medallion members certain perks for the year, such as upgrade certificates. For those who reach that level for 2024, Executive Membership to the lounge will count as three selections, up from two. And starting in February, Delta won’t offer individual memberships through that channel.
The airline recently rolled out special VIP lines for certain Sky Clubs so its most loyal customers aren’t forced to wait for entry. In July, it said customers can get into Sky Clubs within three hours of their departure time, a measure aimed to avoid crowding.
In December, Delta said it will report how busy clubs are in Detroit and Atlanta, from “not busy” to “extremely busy” so travelers know what to expect.
Delta and other carriers have made it harder to earn status and other perks over the years, awarding those tiers to not only frequent flyers but big spenders. Still, travel rewards and co-branded credit cards, like Delta’s partnership with American Express or American Airlines’ with Citi have allowed travelers to rack up miles and perks.

A new American Airlines and British Airways lounge at John F. Kennedy International Airport, November 29, 2022.
Leslie Josephs | CNBC

Airlines have opened larger lounges or new formats to accommodate flyers.
“We look at least seven to 10 years in the future,” Calum Laming, British Airways’ chief customer officer, told CNBC at the unveiling of the large joint lounges with partner American Airlines at John F. Kennedy International Airport on Tuesday.
And United Airlines, for example, earlier this month opened a grab-and-go lounge for travelers at its Denver hub, a new type of space for travelers with limited time and one that frees up other United Club’s for other travelers who want to linger.

WATCH LIVEWATCH IN THE APP More

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased last week to 6.49% from 6.67%.
Mortgage applications to purchase a home gained 4% from the previous week but demand was 41% lower than the same week one year ago.

A For Sale sign appears in front of a house on Oak Street in Patchogue, New York, on May 17, 2022.
Steve Pfost | Newsday | Getty Images

Mortgage rates soared over 7% just a month ago, but since then they have fallen more than half a percentage point. Still, mortgage loan application volume decreased 0.8% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The results also include an adjustment for the observance of the Thanksgiving holiday.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.49% from 6.67%, with points remaining at 0.68 (including the origination fee) for loans with a 20% down payment.
The weakness continues to be in refinance demand, which dropped 13% from the previous week and was 86% lower than the same week one year ago. Strange, given that roughly 100,000 more current borrowers could now benefit from a refinance with the latest rate drop, according to Black Knight.
Mortgage applications to purchase a home gained 4% from the previous week but demand was 41% lower than the same week one year ago. Sales of existing homes continue to drop, while newly built home sales are benefiting from builder concessions, specifically deals in which the builder buys down the mortgage rate.
“The economy here and abroad is weakening, which should lead to slower inflation and allow the Fed to slow the pace of rate hikes. Purchase activity increased slightly after adjusting for the Thanksgiving holiday, but the decline in rates was still not enough to bring back refinance activity,” noted Joel Kan, an MBA economist.
The adjustable-rate mortgage share of application activity increased slightly to 9%, which is lower than the roughly 12% range a month ago, when rates were higher. The ARM share, however, was about 3% at the start of this year, when the 30-year fixed rate hovered near a record low. ARM’s offer lower interest rates but higher risk.
Mortgage rates haven’t moved much to start this week, but by the end of the week that could change, as the highly anticipated monthly employment report is set for release. Any unanticipated swing in either direction will have a direct effect on mortgage rates.

WATCH LIVEWATCH IN THE APP More

The company said a new page on its site will list so-called Airbnb-friendly buildings that let tenants host their apartments just as homeowners do.
Typically, rental buildings prohibit tenants from subletting for short stays.
To start, Airbnb is showcasing 175 apartment buildings in more than 25 major markets.

Airbnb is partnering with several major landlords and management companies to list designated apartment buildings where renters are allowed to offer short-term sublets on the site.
The company said Wednesday that a new page on its website will list so-called Airbnb-friendly buildings, which will give tenants the option to host their apartments just as homeowners can.

Typically, rental buildings prohibit tenants from subletting for short stays.
To start, Airbnb is showcasing 175 apartment buildings in more than 25 major markets, including Los Angeles, San Francisco, Atlanta, Dallas, Houston, Denver, Seattle and Phoenix. Some cities, such as New York City and Washington, D.C., are not available due to local restrictions on short-term rentals.
The platform will help tenants host their rentals, and help the buildings attract tenants who may want to host. How much tenants could earn will vary.
“It depends on the building, depends on the location, there are a lot of different assumptions,” Nathan Blecharczyk, co-founder of Airbnb.
Given how much apartment rents have climbed over the past few years, along with home prices and other rising prices, tenants are increasingly looking for ways to supplement their incomes to make their monthly payments. Rents are starting to ease, but are still up 10% from a year ago, according to Apartment List.

Last year, rents rose more than 15% from the year before.
The new page on Airbnb’s website will also offer a calculator to show how much money the tenant can potentially make per month. The calculation changes depending on the number of bedrooms and the number of nights each building allows, as well as the potential asking rents, given the building’s amenities.
Apartment buildings can also charge the primary tenant a fee of up to 20% of the price of each Airbnb use. For those buildings that have been in test mode so far, Airbnb said tenants have hosted an average of nine nights per month with an average income of $900 per month.
All hosts in the participating buildings must be the primary resident, and the buildings can restrict how many nights per month the apartment can be sublet. That’s generally between 80 and 120 nights per year. The restrictions, which can be enforced since the transactions all take place on the portal, are intended to prevent investors from taking part and subletting the apartments full-time.
The apartment building owner or management company also have the right to review the listings before they go live and deactivate a listing if it does not comply with the building’s standards. They can also mandate a government ID from all potential subletters.
Equity Residential and UDR, which are apartment real estate investment trusts, or REITs, and Greystar, the largest apartment management company in the U.S.,  are among the major names offering apartments with hosting privileges on the new Airbnb platform.
“We believe this platform will provide the right tools for both owners and residents to effectively manage short-term rental activity without impacting overall housing supply,” a Greystar representative said.  “We are collaborating with Airbnb on this innovative approach to participate in the 21st century sharing economy in a thoughtful way.”  
CNBC producer Lisa Rizzolo contributed to this story.

WATCH LIVEWATCH IN THE APP More

Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

Loading chart…

Morgan Stanley: “That’s the kind of stock that we like here. … We are in real companies that make real things, return real capital and Morgan Stanley is one of those.”

Loading chart…

Intuitive Surgical Inc: “I’m now even gun-shy on the 50 times earnings and more stocks, because those are not working. … Be very careful.”

related investing news

Loading chart…

AutoZone Inc: “They are still buying back stock. … I like that stock very much.”

Loading chart…

Gartner Inc: “Gartner Inc is a very good, solid growth stock.”

Loading chart…

SoFi Technologies Inc: “I think this thing is going to make money eventually, but let’s just say that the first bank stock, Morgan Stanley, is a better thing to own.”
Cramer’s Charitable Trust owns shares of Morgan Stanley.

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.

WATCH LIVEWATCH IN THE APP More

Kroger announced plans in October to acquire Albertsons in a deal valued at $24.6 billion.
The Cincinnati-based company is the second-largest grocer by market share in the United States, behind Walmart, and Albertsons is fourth, after Costco, according to market researcher Numerator.
Together, Kroger and Albertsons would be a closer second to Walmart.

Albertsons and Kroger supermarkets
Bridget Bennett | Bloomberg | Getty Images; Brandon Bell | Getty Images

The battle over whether grocery giants Kroger and Albertsons should be allowed to combine is heating up.
On Tuesday, leaders of the two companies defended their proposed merger at a congressional hearing in Washington, where they faced a series of questions about how the deal could shake up the competitive landscape — and potentially the prices that consumers pay at the store.

related investing news

Black Friday was better than feared for retail stocks — Two potential big winners

“I just don’t see less competition going forward,” Kroger CEO Rodney McMullen said at the hearing by the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights. “It’s easy for customers to make a right turn or a left turn.”
Kroger announced plans in October to acquire Albertsons in a deal valued at $24.6 billion. The Cincinnati-based company is the second-largest grocer by market share in the United States, behind Walmart, and Albertsons is fourth, after Costco, according to market researcher Numerator. Together, Kroger and Albertsons would be a closer second to Walmart.
At the hearing Tuesday, McMullen said that the combined company could help lower food prices and improve the customer experience, especially at a time when grocers are racing to adapt to changes like online shopping. He said retailers have to keep reinventing themselves to stay relevant and convince customers to drive to their stores.

Yet the proposed merger has faced intense pushback from elected officials of both political parties and opposition from the United Food and Commercial Workers, a major grocery union that represents thousands of the grocers’ employees.
Sen. Amy Klobuchar, a Democrat from Minnesota, led the hearing Tuesday along with Sen. Mike Lee, a Republican from Utah. Both challenged the companies on their actions, including Kroger’s $1 billion in share buybacks announced last year and plans to pay dividends to shareholders as well as previous deals, such as Albertsons’ acquisition of Safeway.

They emphasized that the proposed deal comes at a time when groceries are taking up more of American families’ budgets. Food prices have surged as inflation hovers near four-decade highs. Prices of everyday items, including butter, eggs, poultry and milk have jumped by double-digits from the year-ago period as of October, according to the most recent federal data available.

Skeptical senators, workers

The hearing offers a preview of the bigger antitrust battle ahead.
For Kroger and Albertsons, the argument is clear: combining will help them weather dramatic industry changes. Online grocery sales are eating into already thin margins. New players, such as deep discounters like Aldi and e-commerce players like Amazon, are also pressuring traditional grocers.
“The marketplace for groceries over the past decade has completely transformed making the competition for consumers fierce,” said Albertsons CEO Vivek Sankaran said at the hearing. “The best way to compete with mega stores like Walmart and highly capitalized online companies like Amazon will be through a merger with Kroger.”
He argued that even as a combined company, Kroger and Albertsons will still be small compared to Walmart, Costco and Amazon.
Ahead of the hearing, members of the UCFW — which represents over 100,000 Kroger and Albertsons workers — shared their worries at a press conference on Capitol Hill. Their concerns ranged from the potential loss of their pension plans to higher food prices to job losses.
Albertsons employees who belong to the union remembered the impact of past mergers. Judy Wood, a longtime cake decorator for the grocery giant, said she and her coworkers were shocked by the store closures that resulted after Safeway’s merger with Albertsons, which was announced in 2014.
Union members also railed against the private equity firms that will benefit from the proposed $4 per share special dividend for Albertsons shareholders announced in conjunction with the deal. Cerberus Capital Management owns a 28.4% stake in Albertsons, according to Factset. For now, the dividend payout is on hold until at least Dec. 9 due to a ruling in Washington state court.
McMullen said on Tuesday that the company does not plan to close stores or lay off employees, but said it will work with the Federal Trade Commission, if needed, to spin off stores for competitive reasons.
As part of its original proposal, Kroger said it already had a plan to overcome concerns about the merger − divesting between 100 and 375 stores in a spinoff. Kroger and Albertsons would work together — and with the FTC — to decide which stores would be part of the spinoff company.
On Tuesday, McMullen said the company is in “active conversations” with unions about the deal and what it means for its workforce. He said the deal would ultimately expand opportunities for employees. Kroger will also spend $1 billion on higher wages and better benefits for store employees after the deal closes, he said.
“A successful business is what creates his job security,” he said. “And we believe we’ll have an incredibly successful business that creates job security.”
Some grocery competitors and industry experts also opposed the deal at the hearing.
Michael Needler, chief executive officer of Fresh Encounter, an independent grocery chain based in Northwest Ohio, said companies like Walmart and Amazon use their size to pressure suppliers for lower prices and better terms. Instead of creating an even playing field, he said, the Kroger-Albertsons deal would create yet another power player who makes it difficult — if not impossible — for smaller grocers to compete.
For instance, he said, larger grocers have run predatory campaigns against his own chain by offering coupons for free groceries.
“I don’t know any other way to point out predatory pricing than buying your competition,” he said.
Sumit Sharma, a senior researcher who specializes in antitrust matters and competition at Consumer Reports, also said at the hearing that he does not see any benefits to combining the companies. Instead, he said retailers would have less reason to increase employee wages. Shoppers would have fewer choices and more sticker shock.
“Even if they sell a few stores, that is going to take competition out of the market,” he said. “So prices will go up.”
CNBC’s Amelia Lucas contributed to this report.

WATCH LIVEWATCH IN THE APP More

Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Tuesday said that the S&P 500 is at a critical moment that could send it higher or cut its upward trajectory short.
“The charts, as interpreted by Carolyn Boroden, suggest that the S&P 500 could be due for some near-term turbulence if it can’t break out above last week’s highs,” Cramer said.

CNBC’s Jim Cramer on Tuesday said that the S&P 500 is at a critical moment that could send it higher or cut its upward trajectory short.
“The charts, as interpreted by Carolyn Boroden, suggest that the S&P 500 could be due for some near-term turbulence if it can’t break out above last week’s highs,” he said.

related investing news

The S&P 500 and Nasdaq Composite closed down on Tuesday while the Dow Jones Industrial Average inched up slightly, with stocks struggling to rebound from the previous day’s losses driven by protests against Covid restrictions in China.
To explain Boroden’s analysis, Cramer examined the daily chart of the S&P 500.

Arrows pointing outwards

The technical analyst sees the index approaching an important hurdle that could pose a real problem for its ability to continue gaining, according to Cramer.
More specifically, the S&P 500’s recent run from the mid-October lows is similar in scale to its rally from late 2021 through early January 2022, he explained. When the rally that started late last year peaked on Jan. 4, the index saw a “nightmare” 1327-point decline into last month’s lows.
“She’s not saying that the rally’s toast. But Boroden says the S&P needs to clear this hurdle — it needs to break out above last week’s high,” he said, adding, “In short, she sees this as a make-or-break moment for the S&P 500, at least in the near-term.”

For more analysis, watch Cramer’s full explanation below.

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.

WATCH LIVEWATCH IN THE APP More