Relief checks 2023 news summary, Thursday 30 March: tax deadline, Social Security payments, house market, inflation relief
Headlines | Thursday 30 March, 2023
- Tax credits are available to reduce the total cost of solar panels
- Automation has increased during the pandemic, threatening already vulnerable workers
- Top tips to avoid errors when filing your tax return directly from the IRS
- There is still time to avoid tax penalties by applying for a tax filing extension
- New Yorkers will have until 15 May 2023 to submit their tax refund
Tax Information and Guidance
- The difference between ‘accepted’ and ‘approved’ tax returns
- Requirements to receive over $10,000 for the CalEITC & EITC with my tax refund
- How to claim the CalEITC without a social security number
- Can you claim both EITC and Child Tax Credit?
Read more from AS USA:
Treasury Secretary Janet Yellen calls for tougher regulation to ensure stability in financial system
The National Association of Business Economics awarded Treasury Secretary Janet Yellen with the Paul Volcker award on Thursday. In her acceptance speech she called for a re-examination of financial regulation “to safeguard financial stability before a crisis occurs” to ensure prosperity. Here are some excerpts from her speech:
"When the financial system works, it can be a powerful engine for economic growth...But a fragile financial system can generate deep pain for American households when it fails."
“We have made much progress in the past 15 years. But recent events show that, clearly, our work is not done.”
“Regulatory requirements have been loosened in recent years. I believe it is appropriate to assess the impact of these deregulatory decisions and take any necessary actions in response.”
Workers who want to apply for Social Security Disability Insurance or Supplemental Security Income need to go through a five-step evaluation to measure their disability in order to qualify for the benefit.
The process is the Social Security Administration’s basis to deny or approve your application.
Find out more on the five steps of disability determination.
Initial unemployment insurance claims tick up
First-time claims for unemployment benefits increased by 7,000 in the week ending 25 March from 191,000 the previous week. The four-week moving average, which smooths out swings in initial claims, also rose to hit 198,250, an increase of 2,000 from a week earlier according to the Department of Labor.
Mortgage interest rates drop for a fourth straight week
Continued uncertainty in the economy as fallout from turmoil in the banking system reverberates helped push the average weekly mortgage interest rate down for a four straight week. For the week ending on Thursday 30 March the average 30-year fixed mortgage rate was 6.32% reports Freddie Mac.
However, while spring homebuyers may be getting lower monthly payments, finding a property that they want to buy will be a challenge. The US inventory of homes for sale remains low with millions of homeowners locked into extremely low-rate mortgages which should buffer any further price decreases according to Redfin CEO Glenn Kelman.
Markets bounce back as investor fears subside
U.S. markets traded higher Thursday as a measure of market volatility showed investor fears are abating. The Nasdaq Composite performed the best out of the three major indexes
Markets are rebounding, but it's premature to celebrate, not until there is more information on how the economy is performing from reports coming out soon.
Fed official says no view yet on rate hike
Richmond Federal Reserve bank president Thomas Barkin said he had not come to a view yet on what rate increase might be appropriate at the Fed's May 1-2 session.
So far, he said, it did not seem as if the failures of Silicon Valley Bank and Signature Bank would lead to a broader financial crisis, with deposit flows now "relatively stable."
He says that inflation, meanwhile, "is still very high. The job market is still really tight," he told Reuters.
"There is a lot of uncertainty about what if anything this bank situation does to consumer confidence, business confidence, business investment, consumer spending, availability of credit...There are a lot of questions about what is going to happen to demand and inflation," Barkin said.
There are several programs around the country that give Americans a helping hand when they are going through financial or other kinds of problems.
These initiatives run by the government and non-profit organizations can help, from paying the bills to making sure you have a car so you can get to work.
The programs are targeted towards people with low incomes, veterans, the elderly and disabled as well as a few other groups.
Workers compensation 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.
Filing a workers compensation claim is much like filing an insurance claim. Oliver Povey gives us a look at workers compensation in 2023.
Check your refund status
You’ve submitted your tax return early, and now you want to know how quickly you can receive your refund.
The IRS has made the process of getting your money back easier, by making your refund status available online. Just click on "Check Your Refund".
Biden calls for regulators to clamp down on large banks
President Biden is calling on regulators to keep a closer eye on large regional banks, following the failure of Silicon Valley bank, according to the Financial Times.
The President also urged the study of preventive measures such as conducting more capital stress tests and making sure that banks have extensive plans in place to deal with crises such as those that had passed earlier this month.
You might be getting nervous with the tax return deadline coming in less than three weeks, but don't be so nervous that you fill it out wrong.
Here are some tips directly from the IRSto avoid making common mistakes when filling out your forms.
Gas prices hit two-month high
The national average price for a gallon of gas hit a two-month high as demand continues to increase heading into the summer while supply drops, according to Forbes.
Average price climbed up to $3.46, an increase of 5 cents on the week, bringing it to its highest point since the end of January. It reached a low of $3.05 per gallon on December 26.
Gas is most expensive in California ($4.83) and Hawaii ($4.82), as a result of factors including state gas taxes, transportation costs, and the use of a more costly lower-emission fuel.
Prices are cheapest throughout the southeast, with the lowest prices in Mississippi, where motorists pay $3.02 for a gallon.
Unemployment claims up for the first time in weeks
Applications for unemployment benefits went up for the first time in three weeks, suggesting some softening in what’s still a robust labor market in which employers are loath to let people go, according to Bloomberg.
Labor Department data showed initial unemployment claims increased by 7,000 to 198,000 in the week ending March 25. The median forecast of economists was for 196,000 applications.
California, Massachusetts, and Michigan are among the states that led the uptick.
Americans have until April 18, 2023 to file their 2022 income declarations and pay any taxes they may owe to Uncle Sam. Filers can submit a request for an extension until Oct.16 to turn in their paperwork, but they aren’t off the hook for any money they may owe.
Failure to file a tax return and pay any money that you owe the IRS can lead to an ever increasing bill with the agency as interest and penalties rack up.
Greg Heilman has the details on the fines you may face for late submission.
Tax season is drawing to a close and eyes will be fixed upon how much tax you will be payng. For the last year with full data, people pay on average 13.6% of their wage on taxes. Though this varies based on state, and is much lower than other so-called western nations, there are a few problems. Most notably, America’s richest pay a very similar amount to everyone else despite earning far more.
Analysis from the White House published in 2021 suggested that the wealthiest 400 billionaire families in America paid an average tax of just 8.2% of their income. Your average Joe has a starting tax rate of 10%, making billionaires the least taxed group in the country.
There are large and unfair differences in the way that income from work is taxed compared to income from assets.
Consumers in the Detroit area will be disappointed as 26 Burger King restaurants are closing down. EYM King of Michigan, the franchise head that was operating the locations at the behest of Burger King, has effectively ceased trading.
In a notice to Michigan’s Department of Labor and Economic Opportunity the company explained “unforeseen business circumstance” as the reason behind the closure. Burger King told CBS News that they could not comment due to pending litigation.
The smaller banks' loss is the big banks' gain
Bank customers moved their deposits to large companies from smaller ones amid a banking crisis that led regulators to seize two regional lenders in quick succession.
According to Bloomberg, data collected by the Federal Reserve showed that large banks gained $120 billion in deposits while their smaller counterparts lost $109 billion, Moody’s Corp. said in a research report.
Small banks’ total deposits fell 1.5% in the week through March 15 from a year earlier, the first annual decline since 1986.
In the US, each state has the power to determine how it will generate revenue through taxation. Some states opt to forgo the collection of income or sales tax. There are a total of eight states that do not tax income at the state level...
Why do some states have no income tax?
As income tax is organised at the state level, it is as simple as states deciding that they do not want to impose it.
What this means is the state hikes taxes on products and other things people can buy to make up the shortfall. This can make these items more expensive and in some cases have unseen consequences. For example, Washington state has a tax of 49.4 cents per gallon on gasoline, one of the highest rates in the nation.
In 2019, 53 million workers paid 12% of their incomes to the IRS, representing the largest tax bracket. The smallest bracket was the 37% group, of which only around 871,748 returns were received.
However, in the same year, the largest number of returns, 22 million, was received by those between an income of $50,000 and $75,000. Closely behind this group were those making between $100,000 and $200,000 a year, of which 21 million returns were submitted to the IRS.
There is a free filing option for taxpayers making $73,000
For those looking at private tax software with a hefty price tag, the IRS wants you to know that there is a free option if you make under $73,000 a year.
The free filing option is available in Spanish and English.
This is a good option for those who are filing a simple return, and will make no difference on the speed at which a return is processed.
Bankers to tighten processes amid industry turmoil
Consumer and mid-sized banks are planning to monitor their internal processes more closely and hold more frequent discussions with regulators as the industry tries to move forward from weeks of turmoil.
Industry leaders were taking stock after the collapses of Silicon Valley Bank and Signature Bank and trying to differentiate solid institutions from troubled ones.
"There is definitely optimism among bankers despite the last few weeks, but they are not turning a blind eye to what has happened," Consumer Bankers Association CEO Lindsey Johnson told Reuters.
"We are still taking stock of what happened and making sure that we're prepared for what's to come and helping consumers work through that," said Johnson.
Home prices recorded a drop for the seventh-straight month in January, due to the rising level of interest rates putting the squeeze on the housing market. The S&P CoreLogic Case-Shiller US National Home Price Index slid 0.5% in January compared to December.
The drop in prices was reflecting a lower demand for houses in the face of inflation, higher mortgages, and economic uncertainty.
IRS offers electronic option to file returns to reduce paper Forms 1099
The IRS has announced that businesses can file Form 1099 series information returns using a new online portal, available for free.
The IRS says the Information Returns Intake System (IRIS) is secure, accurate and requires no special software. Though available to any business of any size, IRIS may be especially helpful to any small business that currently sends their 1099 forms on paper to the IRS.
With IRIS, businesses can e-file both small and large volumes of 1099-series forms by either keying in the information or uploading a file with the use of a downloadable template.
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A city in Los Angeles has announced that eligible people can start applying for a new program intended to help those with financial problems stemming from the covid-19 pandemic.
The City of El Monte launched its new Guaranteed Income Program which will provide cash assistance with no strings attached to 125 eligible residents. Approved participants can receive a monthly payment of $500 for 12 months through a debit card (EBT) that the city will issue.
Hello and welcome to AS USA's live blog on relief checks and financial news. We will bring you the latest on tax season, Social Security, the Fed's interest rate hikes, and much more.
Next week, the Bureau of Labor Statistics will release the March Employment Report, which will provide another data point on the impact the Federal Reserve's move to raise rates has had on the labor market. Currently, the unemployment rate stands at 3.6 percent and is expected to rise to 4.5 percent or higher by the end of the year.