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Personal finance: Social Security payments, Child Tax Credit, Tax Refund, inflation wages... | March 6

Update:
Gas prices of over $5 a gallon are posted at a petrol station in Alhambra, California on March 4, 2022.

Headlines

- February jobs reports shows unemployment rate dropped to 3.8 percent, while the US economy added 678,000 new jobs.

- Inflation remains high at 7.5 percent.

- Gas prices up on average 37 percent ($2.54 to $3.48)compared to this time last year.

- Looking to apply for financial aid? Remember to check the deadline for submitting the FAFSA.

- Social Security Administration announces that it will reopen 1,200 local offices, helping seniors and low-income households.

- While the Dow Jones Industrial Average is down around 3 percent compared to this time last month, defense and weapons manufacturers, like Haliburton (+5.0 %), Lockheed Martin (+15.0%), are in the green.

Helpful links and Information

- Do SNAP benefits expire?

- How long should you expect to wait for your tax return?

- Could gas prices increase more after Russian invasion?

Related news articles:

jobs

US job growth accelerates in February; unemployment rate falls to 3.8%

U.S. employers hired far more workers than expected in February, pushing the labor market closer to maximum employment, but rising headwinds from geopolitical tensions could hurt business confidence and slow job growth in the months ahead.

The Labor Department's closely watched employment report's survey of establishments on Friday showed nonfarm payrolls surged by 678,000 jobs last month. Data for January was revised higher show 481,000 jobs created instead of 467,000 as previously reported.

Economists polled by Reuters had forecast payrolls rising by 400,000. Estimates ranged from as low as 200,000 to as high as 730,000 jobs.

Labor market conditions tightened further, with the unemployment rate falling to 3.8%, the lowest since February 2020, from 4.0% in January. That was despite more people entering the labor force.

American Express suspends operations in Russia and Belarus

American Express Co said on Sunday it was suspending all operations in Russia and Belarus, joining a growing number of Western corporations to boycott business there over Moscow's invasion of Ukraine.

"In light of Russia's ongoing, unjustified attack on the people of Ukraine, American Express is suspending all operations in Russia," the credit card company said in a statement on its website.

"We are also terminating all business operations in Belarus," American Express said.

American Express follows U.S. counterparts Visa Inc and Mastercard Inc, which announced a suspension of their Russian operations the previous day, as well as payments company PayPal Holdings Inc.

Wall St

Wall Street ends down as Ukraine fears eclipse solid jobs data

Wall Street ended lower as the war in Ukraine overshadowed an acceleration in U.S. jobs growth last month that pointed to strength in the economy.

Most of the 11 major S&P sector indexes declined, with financials leading the way with a 2% drop as investors worried about how the West's sanctions against Moscow may affect the international financial system.

The S&P 500 banks index fell 3.35%, bringing its loss for the week to nearly 9%, its worst weekly decline since June 2020.

Equities globally were weaker, with safe-haven assets in demand after Russian forces seized Europe's biggest nuclear power plant in what Washington called a reckless assault that risked catastrophe.

gas

Why does the price of gasoline rise with the Russia and Ukraine war?

The United States has imposed tough economic sanctions on Russia for the invasion of Ukraine but that has prompted a global surge in fuel prices.

Full report here

IRS promotes Interactive Tax Assistant

The Interactive Tax Assistant (ITA) is a tool that provides answers to several tax law questions specific to your individual circumstances. Based on your input, it can determine if you have to file a tax return, your filing status, if you can claim a dependent, if the type of income you have is taxable, if you're eligible to claim a credit, or if you can deduct expenses.

Child Tax Credit cost is justified, study suggests

In December Congress failed to extend the monthly Child Tax Credit, the federal programme which had been credit with a significant decrease in childhood poverty in the six months that it was live for. Childhood poverty costs the United States around $1 trillion every year, according to the 600-page bipartisan “Roadmap to Reducing Child Poverty” report to Congress. 

It is no surprise then, that a new study has found that each dollar spent on the Child Tax Credit equates to a $8 increase in the US economy.

Avoid delays this tax season

Even before submission for tax season 2022 had begun the IRS was warning of considerable delays in the tax returns process this year. The agency was working through a backlog of around six million unproccessed returns from previous years and is struggling to get to grips with the new wave of filings this year. To give yourself the best chance of a stress-free filing and a swift tax refund, make sure to follow these steps...

Over half of Michiganders are struggling with monthly bills

More than half of Michiganders admit that they are struggling to pay monthly bills, according to a household pulse survey conducted by the US Census Bureau. The number of participants who reported having a “very difficult time” paying for bills rose 38% from June 2021 to February, ascending from 8% to 11% while 40% of those who took part in the survey said they have “slight to moderate difficulty” with their monthly expenses.

In Michigan, food prices have climbed faster than the national average. The Detroit Consumer Price Index shows food at home costs increased 10% in a year - about 3.5% higher than the overall national figures. Housing costs also outpaced the national increase of 4.1% with the Detroit area seeing a 7.2% rise.

Inflation currently stands at 7.2% in the US but economists expect it to drop down to under half of that figure by next year.

TAX SEASON 2022

Will tax refunds be lower this year for Americans?

Changes to tax rules over the past year could have consequences for your tax bill and a majority of Americans expect their refund to be lower than last year.

Read more

"Worker productivity is up 62% since the 1970s, yet wages have barely budged in the same period — meanwhile, CEOs in this country have seen their pay explode by 1,322%.

Does anyone REALLY think CEOs are working 1,322% harder than they did in 1978?"

Bernie Sanders, US Senator for Vermont

US NEWS

What does 'taxes being processed' mean?

Tax season is here and to get their refund, many are submitting their return early but seeing that it is taking a while to process. What could be causing delays?

Read more

Losing Child Tax Credit would have a "devastating impact"

Sophie Collyer, research director of Columbia University’s Center on Poverty and Social Policy, spoke with The New Yorker about implications of cutting the Child Tax Credit and what impact it would have of many American families on low incomes.

"We found that 3.7 million more children are in poverty as a result of rolling back the child tax credit between December and January. One very interesting aspect of the CTC program is that it’s cash-based. So many social policies and social programs in the United States consist of in-kind transfers—housing subsidies, food stamps—and they’re infrequently cash. But with this you saw families receiving a cash payment, and cash is fungible. In one month, you might need it to fill in a food budget, but for the next month, it might be used to fix a car. Another month, it might help with child care. That flexibility is also something that comes out of the data, with families using it to meet needs that vary from month to month.

"I think policymakers right now know that they have a lever at their hands that, if pulled, would move millions of children out of poverty. I think that the pandemic also over all has revealed how effective policy can be at stabilizing family income. We did not see a sharp rise in the poverty rate in 2020, and I don’t think anybody in March of 2020 thought that would be the case. Every family experienced a lot of financial strain, but it also revealed that policies can be effective at least at keeping people out of poverty," she concluded.

Read the full interview here

Hiring

US job growth surge underscores economy's strength

US job growth accelerated in February, pushing the unemployment rate to a two-year low of 3.8% and raising optimism that the economy could withstand mounting headwinds from geopolitical tensions, inflation and tighter monetary policy.

The Labor Department's closely-watched employment report on Friday also showed the economy created 92,000 more jobs than initially estimated in December and January. It suggested that the labor market was moving past the Covid-19 pandemic and that the economy has weaned itself off government money.

"The President’s economic agenda includes an array of ambitious proposals designed to expand the productive capacity of economy while promoting more inclusive growth. It focuses on boosting labor force participation by raising effective wages and mitigating barriers to employment. In particular, it proposes an expansion of the Earned Income Tax Credit—which is projected to raise the after-tax wages for 17 million workers—along with family-friendly proposals, such as tax credits and subsidies to make childcare affordable for low- and middle-income households; paid leave for workers; and universal pre-k education for three- and four-year old children. A key element of the President’s agenda is to raise worker productivity through a collection of human-capital initiatives that would expand access to early child education, make college more affordable, strengthen worker training, and achieve universal broadband access. All told, these investments represent one of the most ambitious expansions in training and education in our nation’s history—an investment program that would revitalize the preparedness of our nation’s workforce".

Janet Yellen, US Secretary of the Treasury

US NEWS

Why is gas more expensive in California?

According to the American Automobile Association (AAA), the average statewide price of a gallon of fuel in California has exceeded $5 for the fist time ever, the exact figure on March 5 being $5.17.

The sunshine state is seeing prices much higher than the US average. Prices are increasing nationwide, but California is being affected particularly acutely.

Read more

Are lawmakers worried about inflation with the Russian oil ban?

The United States cannot continue to purchase millions of barrels of oil while Putin wages an unprovoked and unjustified war on Ukraine... This bipartisan bill shows the US Senate’s commitment to stand behind the brave Ukrainian people.

Dick Durbin, Senate Majority Whip

I don't believe this country should be importing anything from Russia. It will send even a bigger message that the United States is in this with Ukrainians for the long haul.

Jon Tester, Democrat senator

There are other producers in the world that could backfill for any Russian oil we don't import.

Daleep Singh, White House deputy national security adviser

We don't have a strategic interest in reducing the global supply of energy... that would raise prices at the gas pump for the American people.

Jen Psaki, White House spokesperson

Senior Dems come out in support of Russian oil ban: what would it mean for gas prices?

Senate Majority Whip Dick Durbin announced Saturday he would be backing a bill banning Russian oil imports

The senator said he would co-sponsor the Ban Russian Energy Imports Act after meeting with Ukrainian President Zelenskyy over zoom on the same day. More than 280 lawmakers were in attendance.

The bill is expected to garner bipartisan support when it is brought for a Senate vote. However, a ban on 7 percent of American oil imports will mean a further rise in the price of gas at the pump.

CORONAVIRUS STIMULUS CHECKS

How much were the first, second and third stimulus checks and when were they sent out?

In a recent press release the Internal Revenue Service put out its annual report highlighting the efforts of its employees in 2021. One of the accomplishments touted by the agency has been successfully delivering “more than $1.5 trillion to people across the nation through Economic Impact Payments, tax refunds and advance Child Tax Credit payments.”

Here's a look at the three Economic Impact Payments, better known as stimulus checks.

Read more

What you need to know about the Child Tax Credit

Elaine Maag,  Senior Fellow at the Urban-Brookings Tax Policy Center, speaks to Yahoo Finance about the Child Tax Credit and its impact on tax filing for 2022. In the second half of 2021 the credit was distributed in the form of a monthly direct payment for eligible families, altering the amount that is on offer to claim with tax returns this year. 

Child Tax Credit and stimulus check letters sent out by the IRS

You may have received a letter from the IRS outlining any outstanding entitlement you have for the Child Tax Credit or the stimulus checks. Eligibility for the programmes, both of which were altered in 2021 due to the pandemic, was dependent on household incomes of the recipients. This means that anyone who suffered a lose of income during the last year could be due more money they originally thought, and they can claim any missing payments in their tax return now. 

SOCIAL SECURITY

How long does it take for taxes to process?

Have you filed your taxes? Are you now desperately waiting for the Internal Revenue Services (IRS) and related systems to process them? If so, you are not alone, with millions of Americans having the same query. Allow us to provide some clarity on the whole situation.

Read more

Tips for your IRS tax return

The IRS is advising filers take particular care with their tax return this year to help the agency work through a huge backlog of unprocessed filings, which could threaten the distribution of tax refunds. Last year millions of people had to wait longer than usual to receive their tax refund from the IRS because the agency was over-worked with the various pandemic support programmes offered by the federal government. 

Know your social security changes

Get ready for these Social Security changes coming in 2022:

- Social Security payments will increase by 5.9%.

- The earnings subject to the Social Security tax will climb to $147,000.

- Social Security beneficiaries who are younger than their full retirement age can earn up to $19,560 before their benefit is temporarily withheld.

- The full retirement age will increase to 67 for those born in 1960.

- The Social Security Administration has redesigned Social Security statements to include more information.

US Money News delves into it:

Good morning and welcome to AS USA

We'll be bringing you all the latest news and information on US inflation and gas prices, as well as updates on the Child Tax Credit and the fate of tax refunds for recent submissions. 

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