Investing

People walk past a store of the sporting goods retailer Nike Inc at a shopping complex in Beijing, China March 25, 2021.
Florence Lo | Reuters

Investors seem to be caught amid the chaos caused by the recent banking crisis, persistent macro headwinds and a potential recession. Looking at stocks with appealing long-term potential could help in these times. 
Here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Nvidia

At the recently held GTC event, chip giant Nvidia (NVDA) discussed its partnerships with leading businesses to advance new artificial intelligence (AI), simulation, and collaboration capabilities across various industries.
Based on the event, Mizuho analyst Vijay Rakesh inferred that demand for Nvidia’s AI solutions strengthened in the past month, driven by the continued momentum for OpenAI’s ChatGPT and large language models (LLMs) processing. Rakesh highlighted Nvidia’s two new products – L4 tensor core GPU and H100 NVL, which are “focused on improving throughput and power as well as expanding inference.”
Rakesh expects Nvidia’s DGX Cloud AI supercomputing service to drive additional sales. He also mentioned a “key win” for Nvidia in the auto space, with leading new energy vehicle company BYD expanding the use of the Nvidia Drive Orin platform to a wider range of vehicles. This, along with collaborations with other EV makers, represents a $14 billion automotive design win pipeline for Nvidia.
Calling Nvidia his top pick, Rakesh reiterated a buy rating and raised his price target to $290 from $230. He sees Nvidia as a “leader in fast-emerging generative AI training and inference as well as dominating gaming and broader AI/accelerated compute, despite near-term investor concerns over consumer and data center slowdown into 2023E.”
Rakesh holds the 94th position among more than 8,000 analysts followed on TipRanks. His ratings have been profitable 58% of the time, with each rating delivering an average return of 17.3%. (See Nvidia Stock Chart on TipRanks)

Nike

From semiconductors, we jump to athletic apparel and footwear maker Nike (NKE). The company recently reported better-than-expected results for its fiscal third quarter (ended Feb. 28). However, Nike’s gross margin contracted significantly due to higher markdowns, which were made to liquidate elevated inventory levels. The margin was also affected by increased input costs and a rise in freight expenses.
Baird analyst Jonathan Komp, who ranks 290th out of more than 8,300 analysts followed on TipRanks, noted that, while Nike’s inventory was up 16% year over year in the quarter third quarter, it declined about 5% sequentially. He highlighted that the company is now targeting “steeper” liquidation in the fiscal fourth quarter.  
Komp also noted management’s commentary about the recovery in greater China. The analyst sees strong margin expansion in the next fiscal year helped by an expected recovery from the “transitory impacts” on gross margin and expansion of the direct-to-consumer mix. 
Komp reiterated a buy rating on Nike and increased his price target to $138 from $130. “NKE remains attractive given positive brand momentum and competitive positioning, high operating margin (low earnings sensitivity), and reasonable valuation (NTM P/E premium vs. S&P +82% compared to +71% five-year average),” the analyst wrote.
Komp has a success rate of 54%, and each of his ratings has returned 14.1% on average. (See Nike Insider Trading Activity on TipRanks)

Lululemon

Another athletic play on our list is Lululemon (LULU). This week, the company impressed investors with upbeat results for the fourth quarter of fiscal 2022 (ended January 29, 2023) and solid guidance. However, the quarter’s margins were impacted by markdowns.
Nonetheless, management expects inventory growth to continue to moderate in the first quarter of fiscal 2023 and to deliver robust gross margin expansion fueled by lower airfreight. (See Lululemon Hedge Fund Trading Activity on TipRanks)
Following the print, Guggenheim analyst Robert Drbul increased his price target for Lululemon stock to $440 from $400 and reiterated a buy rating, saying the company remains his “favorite growth story in 2023.” The analyst thinks demand for Lululemon’s merchandise remains solid, noting that concerns about competitive pressures from emerging athletic brands seem “overestimated.”
The analyst expects Lululemon to benefit from China reopening. He anticipates the significant growth potential in the region to help the company achieve its target to quadruple international revenues by 2026. He also highlighted limited seasonality in Lululemon’s offerings, “virtually no wholesale exposure,” and a strong e-commerce business.
“We also see ample runway for growth in men’s, digital, and international, while LULU continues to deliver strong growth in its “core” (women’s, stores, and North America),” said Drbul. The analyst ranks 439th among more than 8,000 analysts followed on TipRanks. Additionally, 61% of his ratings have been profitable, with an average return of 7.4%.

Wynn Resorts

Casino operator Wynn Resorts (WYNN) has “healthily outperformed” the gaming sector and broader market so far in 2023, noted Deutsche Bank analyst Carlo Santarelli. The analyst remains bullish on the stock and raised his price target to $134 from $128, as he continues to see a “meaningful upside.”
The drivers behind Santarelli’s bullish view include an “inexpensive” valuation, continued sequential increase in Macao visitation and stronger-than-anticipated Macao margins due to expense reductions and a favorable gaming floor revenue mix. (See Wynn Blogger Opinions & Sentiment on TipRanks)
Santarelli is also optimistic about the prospects of the company’s UAE project — an integrated resort that will be located on the man-made Al Marjan Island in Ras Al Khaimah, UAE. The analyst expects the company to provide more details about this project in the coming months, driving investors’ attention to the new growth opportunity.
Santarelli raised his estimates for Wynn, citing “Macau QTD trends, continued strength in Las Vegas, and steady performance at Encore Boston Harbor.” Santarelli holds the 27th position among more than 8,000 analysts on TipRanks. He has a success rate of 64%, with each of his ratings generating an average return of 20.6%.

Dave & Buster’s Entertainment

Restaurant and entertainment chain Dave & Buster’s (PLAY) delivered strong fiscal 2022 fourth-quarter (ended Jan. 29) results, driven by robust comparable walk-in sales growth and the continued recovery in the special events business.  
Management stated that quarter-to-date comparable store sales for the fiscal 2023 first quarter were in the flat to very low-single-digit negative range. Jefferies analyst Andy Barish feels that this trend reflects “some noise” due to the post-Omicron demand surge seen in the prior-year quarter and a spring break shift.
Nonetheless, Barish noted that the underlying momentum experienced in January has continued and sales trends are higher compared to the pre-pandemic period. The analyst expects strength over the near term, as “consumer appetite for experiences” looks solid, driven by modest pricing compared to the industry average, promotional offers and other factors.
Barish reiterated a buy rating on Dave & Buster’s with a price target of $60, concluding, “PLAY remains among best positioned to drive upside and accel growth the next few years, even in a recession.”
Barish is ranked No. 465 among more than 8,000 analysts followed on TipRanks. His ratings have been profitable 58% of the time, with each rating delivering an average return of 9%. (See PLAY Financial Statements on TipRanks)  More

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CNBC asked eight personal finance experts one question: What do you think are the biggest money myths out there for consumers?
Their answers spanned mortgages, auto loans, financial advice, buying that daily cup of coffee, credit reports and money’s role in a happy life.

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It can be hard to separate financial fact from fiction.
CNBC polled eight personal finance experts to help answer one question: What are the biggest money myths out there for consumers?

Here are 9 of the top fallacies the financial gurus debunked.

Myth #1: Giving up a daily coffee purchase is a financial game-changer

Oleg Breslavtsev | Moment | Getty Images

You’ve likely heard this refrain: Buying that daily cup of coffee is killing your chances at burgeoning retirement wealth.
But savers don’t need to be so extreme or austere with their money decisions to be financially successful, said Douglas Boneparth, a certified financial planner and member of CNBC’s Advisor Council.
Sacrificing small expenses that bring us joy isn’t nearly as critical as big decisions like choosing where to live or what car to drive, for example, said Boneparth, president and founder of Bone Fide Wealth.
“Of course, every penny counts,” Boneparth said. “But [housing and transportation] have the ability to change outcomes a lot more than skipping your cup of coffee.”

“Going through our entire existence without some level of joy seems like a little bit of a waste,” he added. “At the same time, there does need to be some discipline and consistency in giving yourself a shot at your financial goals.”
So, consider your budget for discretionary expenses and think about which purchases you want to prioritize.

Myth #2: Auto dealers give you the best rate on a loan

Thianchai Sitthikongsak | Moment | Getty Images

Car buyers often believe that when they finance a purchase through the dealership, the dealer is getting the best rate available for them, said Erin Witte, director of consumer protection at the Consumer Federation of America, an advocacy group. That may be true sometimes, but it isn’t always.
“What consumers may not know, and what dealers will almost never tell them, is that the dealer is getting paid by the lender to give them their business, and it’s often structured around how high the interest rate is,” Witte said.
Dealers therefore can have an incentive to charge a higher rate because they will also make more money, she said.
“Consumers are much better off going to their own local credit union or bank and shopping that quote around to get their own financing,” Witte said. “This can save hundreds or thousands of dollars over the life of the loan.”

Myth #3: Financial ‘advice’ always has your best interests at heart

There’s a misconception that every financial advisor is a “fiduciary,” said George Kinder, who pioneered the “life planning” branch of financial advice.
“That’s just not true,” he said.
A fiduciary advisor has a legal duty to put your economic and financial interests ahead of their own. Lawyers also have separate fiduciary duties to their clients, and doctors to their patients, for example. But not all financial intermediaries are obligated to serve as a fiduciary with their clients.
“There are many financial advisors that are fiduciaries, and there are many advisors that aren’t,” said Kinder, founder of the Kinder Institute of Life Planning.
It’s important to weigh this point when choosing a financial advisor. You can ask a financial pro if they are a fiduciary before doing business with them.

Myth #4: You must pay for frequent credit report access

This used to be true, but has changed in the Covid era, credit expert John Ulzheimer said.
“The Fair Credit Reporting Act gives us the right to one free credit report every 12 months. That’s where AnnualCreditReport.com came from,” said Ulzheimer, who previously worked at FICO and Equifax, two major players in the credit ecosystem.
“Since Covid started, however, the credit bureaus have essentially unlocked that website and now we can get free copies of our credit reports every week for free,” he said. “Clearly, there is no need to buy them from anywhere if you can get so many from the credit bureaus for free.”

Myth #5: Hiring an advisor only benefits the wealthy

Thomas Barwick | Digitalvision | Getty Images

Holistic financial advice — guidance focused on savings, debt and insurance, in addition to investments — can be worth an income boost of more than 7% a year, said Shlomo Benartzi, a behavioral economist and professor emeritus at the UCLA Anderson School of Management.
“Where does that huge gain come from? It comes from eliminating costly mistakes and taking advantage of sure wins,” said Benartzi, who along with Nobel laureate Richard Thaler pioneered the concept of “nudging” investors to boost their savings over time.   
For example, Benartzi said: Many people select the wrong health insurance plan, choosing to pay excessive premiums for slightly smaller deductibles. People often fail to pay down credit cards with the highest interest rates first, wasting money on interest payments. Older workers often fail to maximize their employer match, even though they can withdraw those funds at any time without penalty after age 59½.
“Although households and regulators remain concerned about the cost of financial advice, it’s the absence of holistic financial advice that turns out to be so expensive,” he said.
There are many different fee models for financial advice, and the cost doesn’t have to be significant: Many advisors have hourly or project rates, for example.

Myth #6: Paying off your mortgage early isn’t worth it

Mikolette | E+ | Getty Images

In some ways, this is a math problem, said Brian Portnoy, an expert on the psychology of money and author of “The Geometry of Wealth.”
Conventional thinking holds, where can you get the highest return with your extra money? If your mortgage interest rate exceeds your likely return in the market, it generally makes sense to pay off the mortgage faster.
“There’s a legitimate emotional component to it as well,” said Portnoy, who is also the founder of Shaping Wealth. “Sometimes, people enjoy the sense of owning their homes outright. That’s a valuable psychological asset that should not be sniffed at.”
The conventional wisdom — comparing mortgage rates to investment returns — is also misleading, said Christine Benz, director of personal finance and retirement planning at Morningstar. Paying down a mortgage faster “almost never looks like a great idea” when compared to the stock market, she said.
But a mortgage paydown is akin to a guaranteed “return,” she said. The only fair comparison is to the return in an account that’s similarly guaranteed, such as FDIC-insured investments, said Benz, author of “30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.”

Myth #7: You don’t need emergency savings

“The most egregious myth out there is that folks think they don’t need a stand-alone emergency savings account, when in fact, they do,” said personal finance expert Suze Orman.
These accounts shouldn’t be considered a nest egg or calculated as part of a long-term savings plan for college tuition, a new car or a vacation, for example, Orman said.
Instead, this fund is a safety net tapped only during emergencies — like keeping up with mortgage and car payments if you’re laid off, for example, she said.

Myth #8: You must monitor the stock market daily

Alistair Berg | Digitalvision | Getty Images

“There is virtually no valuable information in the day-to-day movement of the market,” Portnoy said.
In fact, advisors often warn that focusing on daily market swings can contribute to making moves you’ll later regret, like selling at an inopportune time.
“It can be interesting and even exciting to track the latest,” he added. “However, successful investing is really boring. Articulate your goals, set a plan, build a portfolio and focus on something else.”

Myth #9: Money can make you happiest

Studies have linked money with happiness. But it’s what people do with that money that ultimately makes them happiest, Kinder said.
The application of money toward one’s personal fulfillment is at the core of his life-planning philosophy.
Having extra money in the bank “is always going to make you happier,” Kinder said. But it won’t make you the happiest version of yourself, he said.
“The main money myth is that people think money is what will make their life the most happy,” Kinder said. “If you figure out who you truly want to be, that will make you most happy. Because then you can bring the money to bear on that.” More

When was the last time you purchased something and you weren’t asked for a tip?
Not only are requests to tip on purchased goods and services increasingly common, but the amount of the traditional tip also has been on the rise for decades.

During the 1950s, people commonly tipped 10% of the bill. By the 1970s and 1980s, that percentage had jumped to 15%.
In 2023, people typically tip anywhere from 15% to 25%. Consumers on average said they tipped more than 21%, according to a Creditcards.com survey in May 2022.
“What we’re seeing now nationwide is something that is known as ‘tipflation’ … at every opportunity we’re being presented with a tablet that’s asking us how much we’d like to tip,” said etiquette expert Thomas Farley, also known as “Mister Manners.”
The coronavirus pandemic put more upward pressure on tipping. During the height of those days, consumers started tipping for things they never had before to service industry workers.
In February 2020, just before the pandemic began, in food and drink specifically, the share of remote transactions when tipping was offered was 43.4%, according to Square. In February 2023, that share was 74.5%.

Meanwhile, if people were willing to give the person delivering food to their home a 30% tip for service, why not ask if they’d like to tip when they come to pick up? Restaurants started doing that more often — and that practice hasn’t ebbed.
Another reason people are tipping more is because of newer and cooler-looking technologies — kiosks and tablets with three large tipping suggestions that pop up on the screen in front of you. Business owners typically pick those options, and they can also disable the feature if they want to.
To that point, 22% of respondents said when they’re presented with various suggested tip amounts, they feel pressured to tip more than they normally would, according to Creditcards.com.
“They use those options as an indication of what the normative range is and feel compelled to tip within that range. So the more you ask, the more you get,” said Mike Lynn, a professor of consumer behavior and marketing at Cornell University’s School of Hotel Administration.
The three prominent companies with that trendy and sleek look are Square, Toast and Clover. The companies launched about a decade ago to help businesses run smarter, faster, and easier.
In some cases, they charge fewer fees so it’s less of a burden to accept multiple credit cards, don’t require long-term contracts, and offer multiple other useful tools including inventory and employee management.
“They got credit card processing into the hands of individuals and very small merchants,” said Dave Koning, a senior research analyst at Baird. “Square did a great job … it’s been a tremendous growth story. That’s half of the business today,” he added.
But, with customers tipping more, where’s the tipping point?
“I have to believe tips are going to go up from where they are today. But I also think there’s got to be a logical ceiling somewhere. I just don’t know where it is,” Lynn said.
Watch the video above to learn more. More

Djelics | E+ | Getty Images

Company: FleetCor Technologies (FLT)

Business: FleetCor is a business payments company that helps businesses spend less by enabling them to manage their expense-related purchasing and vendor payments processes. The company operates through six segments: fuel, corporate payments, tolls, lodging, gift and other. It offers corporate payments solutions, such as accounts payable automation; vehicle and mobility solutions, including fuel solutions to businesses and government entities that operate vehicle fleets, as well as gift card program management and processing services. The company also provides other products, including payroll cards, vehicle maintenance service solutions, long-haul transportation solutions and prepaid food vouchers or cards.
Stock Market Value: $15.5B ($210.85 per share)

Activist: D.E. Shaw & Co.

related investing news

Percentage Ownership:  n/a
Average Cost: n/a
Activist Commentary: D.E. Shaw is a large multi-strategy fund that is not historically known for activism. The firm is not an activist investor, but it uses activism as an opportunistic tool in situations when it’s deemed useful. The firm seeks solid businesses in good industries, and if it identifies underperformance that is within management’s control, it will take an active role. D.E. Shaw places a premium on private, constructive engagement with management and as a result often comes to an agreement with the company before its position is even public.

What’s happening?

On March 15, D.E. Shaw Group and FleetCor Technologies entered into an agreement pursuant to which the company agreed to appoint Rahul Gupta (former CEO of RevSpring, a health-care billing and payments company) to the board, and agreed to add another, mutually agreed-upon director to the board. Additionally, the company agreed to form an ad hoc strategic review committee to assist the board as it considers various strategic alternatives. D.E. Shaw agreed to abide by certain voting and standstill restrictions.

Behind the scenes

FleetCor is a business payments company with four main business lines: fuel, corporate payments, tolls and lodging. Fuel has traditionally comprised almost 50% of its revenues, and there is a perception in the market that as the world transitions toward electric vehicles, this will become a business with no terminal value as revenue gradually declines. However, revenue in this business increased 14% from last year, and FleetCor has been working to incorporate the transition toward EV fleets into its future business strategy. Moreover, revenue in the other three businesses is growing at 20% to 47% for an aggregate total revenue growth rate of 20.9%. Earnings before interest, taxes, depreciation and amortization margins in all four businesses are close to or over 50% with an overall EBITDA margin of 51.6%. Despite this, the company is trading at a discount to peers because of the perception that it is mainly a fuel-reliant business with secular headwinds.

The best way to realize the full value of each business is to explore a separation of the fuel business, removing any stain on the other high growth and high EBITDA business, which should get a re-rating from the transaction. This could be an attractive asset to private equity, which can analyze and value the fuel business’s expected cash flow and work on a transition plan as EV penetration increases all without having to deal with the misperceptions and biases of a public market.
FleetCor is already on this trajectory and is working amicably with D.E. Shaw. On March 20, D.E. Shaw settled for two board seats and the company agreed to undertake a strategic review, including the possible separation of one or more businesses. Moreover, CEO Ron Clarke is liked and respected by shareholders and perfectly aligned to create shareholder value. Not only does he own 5.6% of FleetCor’s common stock, but his equity compensation plan is out of the money below $350 per share by the end of 2024 and pays him handsomely if the stock price is over $350 by then.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More

Social Security’s combined funds that pay retirement, disability and family benefits will be able to pay scheduled benefits until 2034, according to the program’s annual trustees report released on Friday.
At that time, the program will be able to pay 80% of scheduled benefits.
The new projection date is one year earlier than the forecast from last year, prompting retirement advocates to call on Congress to fix both Social Security and Medicare.

A Social Security Administration office in San Francisco.
Getty Images

The Social Security trust funds that about 67 million Americans rely on for benefits are scheduled to be depleted in 2034, one year earlier than was projected last year, according to the annual trustees’ report released by the Treasury Department on Friday.
Unless Congress takes action, at that time, 80% of scheduled benefits will be payable from the combined funds for old age and survivors insurance and disability insurance.

The new depletion date comes as the trustees updated their projections for the U.S. economy to include recent output and inflation data. The expected levels of gross domestic product and labor productivity were revised down by about 3% for the projected time period, which worsened the outlook for Social Security’s combined funds, according to the report.
Meanwhile, Medicare’s hospital insurance trust fund will be able to pay 100% of scheduled benefits until 2031, three years later than projected last year.
More from Personal Finance:How to prioritize retirement and emergency savingsRoth IRAs don’t require withdrawals — unless they’re inheritedNew tool lets you play at fixing Social Security woes
The new estimates prompted renewed calls for fixes to the programs, which Treasury Secretary Janet Yellen referred to as “bedrock programs that older Americans rely upon for their retirement security.”
“The Biden-Harris Administration is committed to ensuring the long-term viability of these critical programs so that retirees can receive the hard-earned benefits they’re owed,” Yellen said in a statement Friday.

The White House earlier this month laid out a plan to extend the solvency of Medicare’s hospital insurance trust fund, also known as Medicare Part A, which covers hospital, nursing facility and hospice services for eligible beneficiaries.
The proposal aims to extend the hospital insurance fund for 25 years by increasing the Medicare tax rate for incomes over $400,000 while closing loopholes that enable income to be shielded from that tax.
However, the White House has not put forth any specific proposal for resolving Social Security’s funding woes, though President Joe Biden has called for protecting and strengthening the program with his budget.
“Congress must take its responsibility to protect Social Security and Medicare seriously, by developing a comprehensive plan and doing so in a way that is accountable and fully transparent to the American public,” AARP CEO Jo Ann Jenkins said in a statement Friday.

Social Security isn’t ‘going bankrupt’

In its report, the Social Security trustees also issued separate depletion dates projections for the program’s two funds.
The old age and survivors insurance trust fund, which pays benefits to retired workers, their spouses and children and survivors of deceased workers, will be able to pay full benefits until 2033, also one year earlier than reported last year. At that time, 77% of benefits will be payable.
That depletion date is 10 years away — fewer years than projected by the trustees since reforms were implemented in 1983, noted the Peterson Foundation, a nonpartisan organization focused on raising awareness of the nation’s fiscal challenges.
In a statement, Jason Fichtner, chief economist at the Bipartisan Policy Center, a think tank promoting bipartisanship, called the 2033 depletion date “particularly alarming.”
The disability trust fund will be able to pay full benefits through at least 2097, the last year of the report’s projection period.
Yet experts also emphasized there are signs of strength for the program, which had $2.83 trillion in combined trust fund reserves as of the end of 2022.
“Social Security is not ‘going bankrupt’; the program will always be able to pay benefits because of ongoing contributions from workers and employers,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
The insolvency dates have stayed roughly the same despite the onset of the Covid-19 pandemic and economic upheaval, he noted.
To shore up the funds, lawmakers may generally choose between raising taxes, cutting benefits or a combination of both.
“Congress should act immediately to restore a sense of confidence, both in the government and in the program,” said Nancy Altman, president of Social Security Works, an organization advocating for expansion of the program through more generous benefits and higher taxes.

Don’t claim benefits out of fear

While headlines about closer depletion dates may inspire people to want to claim their benefits earlier, it is generally still best to wait until full retirement age or later, according to Joe Elsasser, a certified financial planner and founder and president of Covisum, a Social Security claiming software company.
“Don’t elect benefits out of fear,” Elsasser said.
Even if a benefit cut does happen, most people will still be better off if they delay, which increases the size of their monthly benefit checks throughout retirement, Elsasser said. Couples especially may benefit from delaying one person’s benefit, he said.
By consulting a financial advisor or Social Security claiming software, you can see how a benefit cut may impact your Social Security claiming decision.
“Many people are surprised that delay is still the best choice,” Elsasser said.
As you plan for retirement, testing your projected income against a full benefit cut is wise as you consider all of the what ifs, he said.
“If your assets are not enough to support your lifestyle even in the presence of a cut, then consider smaller lifestyle cuts now, save more or postpone retirement by a year or two to make up the gap,” Elsasser said. More

Smart Tax Planning

The deadline to file a federal tax return is Tuesday, April 18, for most Americans.
The IRS had issued about 54 million refunds worth roughly $158 billion as of March 17.
Here’s what late filers should know about common mistakes, tax extensions and penalties.

Songsak Rohprasit | Moment | Getty Images

This is an excerpt from the Personal Finance team’s weekly Twitter Space, “This week, your wallet.” Check out the latest episode here.
Tax Day is fast approaching. The deadline to file a federal tax return for most Americans is just over two weeks away, on Tuesday, April 18.

Here’s what late filers need to know, according to CNBC’s Kate Dore, a personal finance reporter and certified financial planner.

1. You may be able to get free help preparing your return

Certain taxpayers can leverage free resources when filing a return.
For example, the IRS Free File program offers free, guided tax preparation online. The program, delivered via a public-private partnership, is available to taxpayers with an annual adjusted gross income of $73,000 or less in 2022.
Free File is available to 70% of taxpayers, but few use it — and they may inadvertently pay to file a return.

2. Your tax refund may be smaller this year

The IRS had issued 54 million refunds as of March 17. About 75% of the processed tax returns have gotten a refund.

The average refund was $2,933, compared with $3,305 at the same point last year. The reduction is tied to expired pandemic-era aid such as boosted child tax credit and earned income tax credit payments, for example.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

3. Common mistakes may trip you up

Common mistakes on a tax return might delay processing of the return or a refund you’re owed.
Among the biggest: Missing tax forms.
That might occur, for example, if you’re a gig economy worker who received a 1099 form but didn’t report that income on your tax return. Or perhaps you didn’t report investment income because you didn’t get a copy of your form in the mail — though it’s likely available online.
However, the IRS receives copies of those tax forms and knows if that information is missing on your return.
Other common mistakes include incorrect spelling or digits for your name, birthdate, Social Security number, or bank account and routing number information.
Not filing electronically and not asking for direct deposit may also delay your tax refund.

4. You can get an extension to file — but not to pay

Taxpayers can request a six-month extension to file their federal return.
This might make sense if you’re missing a tax form, for example. Taxpayers can request an extension for free online via IRS Free File regardless of their income.
The kicker: You can’t get an extension to pay your federal tax bill. You must pay that bill by the April 18 deadline. You can estimate that bill by going through the process on tax software and using estimates for missing forms.
Another caveat: Taxpayers who ask for a federal extension must request one separately for their state tax return.

5. There are penalties for not filing and not paying

The IRS levies financial penalties for failing to file a return, and for failing to pay your taxes.
Not filing a return results in a penalty of 5% of your unpaid balance per month or part of a month, up to 25%, plus interest, which is currently 7%.
Failing to pay a tax bill results in a lesser 0.5% penalty of your unpaid balance per month or part of a month, up to 25%, plus interest.
If you can’t afford to cover your full balance, you may apply for an installment agreement, a long-term monthly payment plan. More

Ask an Advisor

We’re in a period of high uncertainty and many “people are pretty afraid right now,” said Brad Klontz, a psychologist and certified financial planner.
That fear can lead people to make money moves they’ll regret.

With high inflation, the threat of a recession and ongoing market volatility, we’re in a period of high financial uncertainty. Understandably, many investors “are pretty afraid right now,” said Brad Klontz, a psychologist and certified financial planner.
And when we’re stressed, our frame of reference tends to become short, said Klontz, who is also a member of CNBC’s Financial Advisor Council. In other words: The uncomfortable moment feels like the only thing that matters.

While that tendency is a survival mechanism that’s helped us act in stressful situations, Klontz said, it can make us do the “absolutely wrong thing when it comes to investing.”
Instead of acting impulsively with your money, take these two steps, Klontz said.

1. Remind yourself why you’re investing

Most of us are long-term investors, Klontz said. “Does looking at a really narrow frame of reference make sense for you?” he asked.
If you’re investing for retirement, you may not need that money for decades, and so the answer is no. What’s happening with the S&P 500 over a few months, or even a few years, shouldn’t matter too much.
Zooming out, the average annual return on stocks was around 8% between 1900 and 2017, after adjusting for inflation, according to Steve Hanke, a professor of applied economics at Johns Hopkins University in Baltimore.

More from Ask an Advisor

Here are more FA Council perspectives on how to navigate this economy while building wealth.

Simply put, if you can’t withstand the bad days in the market, you’ll also lose out on the good ones, experts say.
Over the last roughly 20 years, the S&P 500 produced an average annual return of around 6%. If you missed the best 20 days in the market over that time span because you became convinced you should sell, and then reinvested later, your return would shrivel to just 0.1%, according to an analysis by Charles Schwab.

2. Ask yourself: What is the money for?

Of course, most people aren’t saving and investing only for long-term goals like retirement. If market volatility is causing you a lot of stress, you may need to make adjustments.
If you’re investing in the market for a shorter-term goal like buying a car or house, “there’s a good chance you’re going to get hurt,” Klontz said. “When you need that money, it might be down 10%, 20% or more.”

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Nearly one quarter of all couples are primarily staying in their current relationships due to financial dependency, according to a new report.
There can be varying degrees of financial entanglements, but couples should be on the same page and on equal footing, experts say.

Marriage is a union of love, but it’s also an economic arrangement.

Stacy Francis
CEO of Francis Financial

“Marriage is a union of love, but it’s also an economic arrangement,” Francis said, “and we don’t think about the money part until there are issues and problems.”

Why a ‘yours, mine and ours’ account setup is smart

Experts say there’s generally not a right or wrong way for couples to manage their assets, as long as they are on the same page.
There can be varying degrees of financial entanglements. About 62% of couples who are married, in a civil partnership or living together share at least one account, LendingTree found. Fewer — roughly 41% — completely combine funds. 
Francis recommends “having yours, mine and ours,” so each person has their own money in additional to a joint account that they each contribute to — “typically as a percentage of your salary that goes to joint expenses.”
Co-mingling an account may lead to less frequent fights about money, LendingTree also found. Of those who share at least one account, only 12% said financial issues caused problems with their partner, compared to 15% of those who don’t have a shared account.
“By sharing an account, it gives each partner equal visibility into what’s going on in that account,” said Matt Schulz, LendingTree’s chief credit analyst. “That can help grow trust within the relationship.”
Further, 58% of those who share at least one bank account said they stayed together after a financial argument, compared to only 47% of those who don’t have a shared account.

Those who choose to pool their money together could still benefit from setting aside time to discuss where they are with their finances and where they would like to go.
“Openness, honesty and transparency are crucial for a relationship’s success, and that’s certainly true when it comes to money,” Schulz said.
Francis recommends “financial date nights,” a routine she still adheres to in her own home, to discuss savings goals, big expenses and future plans.
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