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USA finance and payments: gas stimulus check, tax deadline, Child Tax Credit portal | 4 April

Update:
The deadline to file 2021 tax returns is in two weeks. Tax refund payments could help household finances in light of increased prices for gas and more.

Retirement age raised to 67 in US

Changes to the minimum retirement age come into force this year in the US. The full retirement age used to be 65 for those born in 1937 or earlier. Those born between 1943 and 1954 are able to fully retire at 66. The full retirement age further increases in two-month increments each year to 66 and 10 months for those born in 1959 - up from 66 and eight months for those with a birth year of 1958.

The full retirement age for those who turn age 62 in 2022, ie. those born in 1960 or later, is now 67. The earliest age that a person can start receiving Social Security retirement benefits will remain at 62.

Taxpayers can get face-to-face help filing on Saturday

US taxpayers who are unsure about how to file their 2021 tax returns can get personal assistance this Saturday. The Internal Revenue Service opened many of its Taxpayer Assistance Centers (TACs) on the second Saturday of each month from February through May 2022 to offer in-person help. The 'special Saturday' help is available on Saturday 9 April from 9am to 4pm and no appointment is needed. 

People can also ask about reconciling advance Child Tax Credit or third round Economic Impact Payments or inquire about various other services available while at an IRS office. The special Saturday service will be available this weekend  - ahead of the 18 April tax filing deadline and on 14 May.

SOCIAL SECURITY

How to know how much will I get in Social Security when I retire?

Social Security can seem like a bit of a mystery as your entitlement is accrued over time and can be affected by various things. According to the Social Security Adminstration (SSA), your retirement benefits will be primarily based on your lifetime earnings. Fortunately they also offer a couple of online resources which will allow you to estimate the size of your payment and plan for retirement.

Read more

How does crypto affect your tax returns?

The IRS requires fiings to report any income and profits from investments in their tax returns each year, but cryptocurrency holdings can represent a tricky middle-ground between the two. With just two weeks left in filing season 2022, this handy guide from the Wall Street Journal talks you through the main things to be aware of if you trade, or even just hold, cryptocurency. 

Gas prices begin to fall around the country

After weeks of sky-high gasoline prices, consumers in the United States are finally getting some respite at the pump. A combination of sustained high inflation rates and the ban on Russian oil imports had pushed the average price to record-breaking levels and President Biden was under pressure to find a solution. 

Last week he announced the release of one million barrels of crude oil from the US' strategic reserves with the aim of increasing supply to bring down the cost. It seems like this is now having an effect and the average cost is falling. 

FINANCIAL NEWS

Can a single person get the Earned Income Tax Credit?

Even two years in, the pandemic continues to cause financial difficulties for millions of households across the United States, a situation exacerbated by the gas price rises in recent months. The IRS offers a few different forms of financial relief to help families and the Earned Income Tax Credit (EITC) is one of the most widely used. 

Low- or middle-income workers may be able to claim a substantial tax refund from the EITC, although there are some requirements for eligibility. We take a look at how the programme works...

Read more

Are you eligible for the EITC?

The Earned Income Tax Credit (EITC) has been hailed as a key tool to tackle the economic struggles of the past two years, giving financial relief to low- and middle-income households. Filers have until 18 April to submit their 2021 tax return and claim the EITC, here's everything you need to know...

US NEWS

Workers Compensation 2022: what is it and how can I apply?

Workers compensation, or workers comp, pays an employee’s medical bills and a percentage of wages, among other things, due to an injury or illness that occurs on the job or as a result of their job. Its “no fault” feature is a give and take between employee and employer, the employer agrees to pay, and the employee generally can’t sue for damages.

Read more

What support is there for the unemployed?

Although unemployment insurance and compensation is a federal-state joint venture to safeguard individuals against financial distress and destitution for a limited amount of time after they become unemployed, beyond some basic federal mandates the states can run their programs with a fairly free hand.

The US Bureau of Labor Statistics released their summary of the US employment situation for March 2022. The standout information is the further decline in unemployment, now down to 3.6 percent

Why are gas prices so high, really?

While much of the narrative around US gas prices has centered upon the war in Ukraine, there are other factors at play. Despite high inflation and squeezes on consumers, companies making the most money out of a war are making more money than ever.

The largest oil and gas companies made a combined $174 billion in profits in the first nine months of 2021, with new records this year. Exxon Mobil is already estimating their profits could be $2.5 billion higher at the end of the first financial quarter compared with 2021. Full number swill be released at the end of this month.

CRYPTOCURRENCY

Cryptocurrency: what are the differences between Bitcoin and altcoins?

Since Bitcoin stormed into people’s consciousness in 2018, many have tried to replicate its success. These are the altcoins, simply ‘alternative coins’.

As Bitcoin has been hitting higher and higher heights, culminating in its highest dollar exchange rate back in November 2021 of $64,400 to one Bitcoin, challengers in the altcoins have been exploring ways to challenge their predecessors market dominance. One of these is Ethereum, which is a cryptocoin which has been at the front of the NFT marketplace and is the central currency used for purchasing NFTs.

Read more

What have progressives said about student debt?

We’ve been saying for years now that we need to keep payments on pause until we cancel student debt.

Natalia Abrams, president and founder of the Student Debt Crisis Center (SDCC)

I’m hopeful that the president is going to take action. It is something that is extraordinarily popular, not just with people with student loans, but families of people going to college.

Cory Booker , New Jersey senator

Inaction is going to be really dangerous for us in the midterms... Enthusiasm is really low, it’s important to listen to the people who have sent us to represent them and then us, and I know that student debt cancellation is a priority.

Ilhan Omar, Minnesota representative

Pressure on Biden as student loan freeze set to end May 1

President Biden's hopes for the midterm elections must already be pretty meagre, and he risks alienating more of his voters if the freeze on student loan repayments is not extended, or even cancelled.

He is facing pressure from borrowers who want to see their money return, but the unsustainable amount of student debt of over $1 trillion will never be paid back. Failure to deal with this issue could put another arrow in the bow of some of his critics of him as an austerity president. All the pandemic era support has ended, in effect raising people's taxes in the year of an elecion; a dangerous combination.

CRYPTOCURRENCY

What are the cryptocurrencies that have increased the most in value this year?

A new survey from the US cryptocurrency exchange Gemini, shows that nearly half of cryptocurrency holders were first-time participants in 2021. The digital coins saw major upswings last year, but most have since fallen from those peaks.

Bitcoin remains the dominate cryptocurrency with over $800 billion in market capitalization, but its market share has been eroded with a number of new entrants. Only one virtual currency, Terra's LUNA, has managed to gain ground since the start of the year hitting an all-time in April.

Read more

Don't forget state income tax deadlines may differ from IRS deadline

The federal income tax deadline filing deadline is fast approaching, two weeks from today. If you won't have your 1040 Form ready by 18 April, you'll need to ask for an extension by then. That will give you an extra six months to submit your 2021 tax return, but you'll need to pay any taxes you may owe by 18 April to avoid penalties.

You may have to file a 2021 state income tax return as well. The District of Columbia and 41 states require residents to submit an income tax declaration. While the deadline to file in most is 18 April, six states have later filing dates.

19 April: Maine & Massachussetts

30 April: Iowa

2 May: Delaware & Virginia

15 May: Louisiana

Housing market not as frothy as it appears

Housing prices have been rising at their fastest clip in years as Americans reassess their living arrangements now that they are working more and more from home. On top of that, a slowdown in new home construction has created a shortage of available homes on the market.

This has led to stories of houses being bought nearly sight-unseen and above market value. The St Louis Federal Reserve took a look at house listings to see if this housing fervor was playing out in the data. Although the median number of days that houses are on the market is lower than usual, it isn't dramatically so. Furthermore, the median followed season trends over the years.

SOCIAL SECURITY

What is the average Social Security check at age 65?

The retirement age when Americans can claim the full benefits earned over their years of laboring from the Social Security Administration is gradually getting higher. Currently, those who were born in 1960 and after will need to wait until they are 67 years old, and one month, to reach the full retirement age.

Beneficiaries can start earlier, but at the cost of reduced monthly payments in their golden years. Likewise, retirees can wait longer to start claiming benefits to receive even higher monthly entitlement.

Full details

Get child and dependent care expenses reimbursed on 2021 tax returns

Families with children will need to file a 2021 tax return this year if they want to receive any money they are eligible for from the enhanced Child Tax Credit. When you are filing though, you will want to check out other tax credits that were beefed up under the American Rescue Plan.

One may be of particular interest to families that have older dependents as well as children they claim on their tax filing. Although the Child Tax Credit gives taxpayers up to $3,600 per child, the Child and Dependent Care Credit could be worth up to $8,000 for a family with two or more children or dependents. Half that amount if they have just one.

Full details

Crude oil down around $100 but for how long?

The price of crude oil after spiking to $140 per barrel has come down but at around $100 remains higher than before the Russian invasion of Ukraine. Part of the decrease is due to investors shaking off some of their initial panic about the effect sanctions on Russia would effect global energy supplies, but as well, reduced demand from China as bouts of covid and subsequent lockdowns take a toll on the Asian nation.

How long the latter will last can only be seen. The Biden Administration is encouraging American producers to bring online capacity that it says is lying idle while promising to release one million barrels a day from the strategic reserves for the next six months.

2022 tax refunds outpace last year

The IRS has been diligently processing 2021 tax returns sending out nearly 58 million tax refunds so far this year for a total of almost $189 billion. The average taxpayer has received slightly more this yer compared to 2021, $3,263 versus $2,902, respectively.

The IRS has recommended that Americans use direct deposit to receive their tax refund faster, and in 2022 more taxpayers than ever followed that advice,topping 96 percent of filers who have submitted their tax declaration this year up from 94 percent in 2021.

2022 TAX FILING SEASON

Tax Deadline 2022: when is the last day to submit the documentation?

Filers have around two weeks left to submit tax returns to the Internal Revenue Service (IRS) before the deadline for tax season 2022. Usually the deadline is 15 April but the filing process is impacted upon by Washington, DC holidays, and this year’s Emancipation Day holiday in the District of Columbia falls on that date. Residents in certain counties will also be able to take advantage of a one-month extension due to natural disasters such as winter storms and tornadoes. 

Read more

Don't miss out on tax credits for children when filing 2021 tax returns

Filing taxes has never been at the top of activities people are passionate about doing but in 2022 that may change, especially for taxpayers with children. The American Rescue Plan passed by Democrats in March 2021, besides sending a third round of stimulus checks, tweaked several tax credits.

Eligible taxpayers can take advantage of thousands of dollars in tax credits if they have children, through the 2021 Child Tax Credit, Child and Dependent Care Credit and the Earned Income Tax Credit. Also, those that welcomed a new member to the family in 2021 could potentially see another $1,400 stimulus check.

Here’s a look at the tax credits available.

Gas

Gas prices continue to creep down from all-time highs

The national average price of gas moved slightly lower on Monday to $4.189 per gallon. Prices in California's Los Angeles, San Diego and San Francisco metro areas dropped below $6 on average with prices statewide at $5.854 a gallonaccording to AAA.

WORLD NEWS

Will oil companies to increase production as invasion of Ukraine limits global supply?

Just as the International Panel on Climate Change released the preliminary findings of its most alarming report on the state of climate science, the Russian invasion of Ukraine has thrown global energy markets into a tail spin. The world's dependence on fossil fuels has never been so viable to leaders and the public.

Short-term solutions for the fuel crisis are being tapped, but none send a positive sign of rapid de-carbonation happening any time soon. Without such a change, the report paints a grim picture.

Read more

Wall St

Wall St Week Ahead-'Robust' corporate cash may buoy stocks after rocky quarter

As the U.S. stock market ends a rocky first quarter, investors are looking at what could support equities in the coming months - with high cash levels at companies one potential boost as executives deploy resources for share buybacks, dividends or deals.

The S&P 500 posted its first quarterly loss since the beginning of the pandemic, although it rebounded in March, reducing the benchmark index's year-to-date decline to about 5% from as much as 12.5% at the quarter's low point.

The outlook for stocks is still threatened by rising interest rates as the Federal Reserve tightens monetary policy, as well as by spiking inflation and uncertainty over the war in Ukraine. The ability of companies to deploy cash could help soothe investors about some of that unease.

“While cash levels are off the highs from last year, they are still well above the pandemic levels and remain supportive for buybacks, dividends and M&A, which are all shareholder friendly activities,” said Keith Lerner, co-chief investment officer at Truist Advisory Services.

Wall St

Wall St posts modest gains as jobs report keeps Fed hikes on track

The S&P 500 rose modestly to kick off the second quarter on Friday, as the monthly jobs report indicated a strong labor market and is likely to keep the Federal Reserve on track to maintain its hawkish policy stance.

The Labor Department's employment report showed a rapid hiring pace by employers while wages continued to climb, although not enough to keep pace with inflation.

U.S. employers added 431,000 jobs in March, which was shy of the 490,000 estimate but still showed strong job gains. The unemployment rate dropped to 3.6%, a new two-year low while average hourly earnings rose 5.6% on a year-over-year basis.

The report heightened expectations that the central bank is likely to become more aggressive in raising interest rates as it seeks to curb inflation as it unwinds its easy monetary policy.

US NEWS

Did unemployment rates increase or decrease over March?

The US Bureau of Labor Statistics released their summary of the US employment situation for March 2022. The standout information is the further decline in unemployment, now down to 3.6 percent, as well as as non-farm employment rising by 431,000 people, though this number was slightly down on estimates of 450,000.

Compared to a month ago, the signs are still positive for the US economic recovery. However, inflation is still at record levels and is yet to show signs of slowing.

Read more

jobs

Covid weighing less and less on the U.S. job market

The coronavirus pandemic's grip on the U.S. job market notably loosened in March, two years after a state of emergency was declared, as the number of people homebound by covid-19 concerns hit a new low and fewer people reported having to work remotely. In all, the government's benchmark monthly nonfarm payrolls report out Friday showed that by several metrics - including the total number of unemployed dropping below 6 million and a 3.6% unemployment rate - the U.S. job market had all but recovered from the devastating hit delivered in the first two months of the pandemic when 22 million people  were thrown out of work.

US employment situation following March's jobs figures

US Secretary of Labor Marty Walsh gave an update on the employment situation in the US in the wake of March's report which detailed how jobless figures have decreased slightly compared to February's data.

“The Bureau of Labor Statistics reported that the American economy added 431,000 jobs in the month of March, and the unemployment rate was 3.6 percent, down from 3.8 percent in February. With 7.9 million jobs added since President Biden took office and unemployment close to pre-pandemic levels, this strong job growth continues our historic, worker-centered recovery.

“The Administration’s strategy to tackle the pandemic and grow the economy from the bottom up and the middle out has gotten America back to work and brought real wage gains for many of the hardest-pressed families. For example, average weekly earnings for non-supervisory employees in Leisure and Hospitality businesses grew much faster than price increases over the past year. In addition, labor force participation continued to grow, with significant gains among women aged 25-54.

“The Department of Labor remains focused on empowering all workers with access to good jobs and the skills and supports they need to fill them. Through the Good Jobs Initiative and more, we are investing in apprenticeships and career pathways that not only expand opportunity and equity for marginalized workers, but also strengthen key supply chain industries thereby lowering costs for families and small businesses.

“It’s clear that a strong focus on public health and workers’ needs has gotten results, and this is no time to let up. We need to make continued investments in the tools that workers, employers and communities need to prevent the spread of COVID-19 and continue our historic recovery.”

Welcome to AS USA

Good morning and welcome to AS USA's daily live blog on the latest financial news in the US, where the deadline for Americans to file their 2021 federal tax return is fast approaching. Most US taxpayers have until 18 April to file with the IRS, but those who need more time can file for a six-month extension. Likewise, most states require residents to file income tax returns on or prior to the federal deadline.

We'll also be looking at the state of rising gas prices in the country and the possibility to replace the Child Tax Credit, among other fiancial news coming out of DC and around the nation that could affect you.

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