Relief checks 2023 | Summary news 18 April

Home prices to set the tone for 2023 inflation

The housing market will be a big factor in determining how the rate of inflation will go for the year.

According to Forbes, this is because the cost of homes makes up almost 60% of the Consumer Price Index. House prices are also rising at a rate of 8.2% a year.

Increased demand in Iowa food banks in the face of impending SNAP restrictions

The Iowa legislature, with the support of the Republican supermajority, is poised to approve some of the country’s harshest restrictions on SNAP. They include asset tests and new eligibility guidelines. By the state’s own estimate, Iowa will need to spend nearly $18 million in administrative costs during the first three years to take in less federal money, according to The Washington Post.

The bill’s backers argue the steps would save the state money long term and cut down on what they call “SNAP fraud.”

Iowa’s food bank operators say that as they are already seeing more people needing their services, any new restrictions on food stamps are likely to fuel a surge in demand.

Amazon cuts jobs in advertising unit

Amazon has laid off workers in its advertising unit as part of previously announced cuts that would affect 9,000 employees. The company had already fired 18,000 people in earlier layoffs that had been declared a few months ago.

Amazon is carrying out the largest number layoffs in its history, after going on a hiring spree during the covid-19 pandemic

Credit card users behind on their payments

Consumers are starting to fall behind on their credit card and loan payments as the economy softens, according to executives at the biggest US banks, although they said delinquency levels were still modest.

Profits at Bank of America, JPMorgan, Wells Fargo, and Citigroup beat analyst forecasts as lending giants earned a windfall from rising interest rates. But industry chiefs warned that the strength would tail off this year as a recession looms and customer delinquencies climb.

"We've seen some consumer financial health trends gradually weakening from a year ago," Wells Fargo Chief Financial Officer Mike Santomassimo said on a conference call to discuss first quarter results.

While delinquencies and net charge-offs - debt owed to a bank that is unlikely to be recovered - have slowly risen as expected, consumers and businesses generally remain strong, the bank's CEO Charlie Scharf said.

(REUTERS)

Mortgage rates on the upswing

Mortgage rates zoomed to beyond 7% in October last year, then slid to under 6% levels in February 2023.

They're now on their way back up, and prospective homeowners might be wondering how the outlook for the housing market will turn out to be this year. Our coverage has some answers.
 

FINANCE

Will the housing market crash in the US in 2023? Here’s what the experts say

The housing market is down from its peak in the summer of 2022 cooled by rising borrowing rates and many previously red-hot markets being overvalued. But will the US see a housing market crash in 2023?

While the general downturn is expected to continue, it depends on which market, with four potentially set for a major correction. Other markets though could come through with but a scratch and some even seeing slight gains.

Greg Heilman tells us that the consensus among housing experts is that they are all thinking this is going to be a moderate downturn.

FINANCE

Is it good to buy when the housing market crashes?

Purchasing a property during a recession may save you money. The 2008 recession and housing market crisis highlighted how much property values affect the economy.

If you’re considering purchasing a property, you may have a different worry than other consumers: how long each upswing and recession will endure and how severe it will become. Is buying during a recession risky?

As Andy Restrepo reports, even specialists have failed to forecast home market crashes. Prices rose sharply in 2020 and 2021, but the Federal Reserve’s interest rate hikes may result in lower house prices.

FINANCE

Stimulus checks in April 2023: which states pay it and amounts

Last year, prices began to rise rapidly, and to support residents in combat inflation, various states began sending out relief checks. Although inflationary pressure in the market has weakened in recent months, the delivery of support will continue in April.

Read more in our full coverage on which states are offering stimulus checks. 

Housing starts second highest in nearly 40 years; supply glut helps drive down rents

A building boom has begun with 608,000 new projects with five or more units in February, an increase of 14.3% and the second highest since 1986. According to Redfin data only April 2022 exceeded the recent new housing starts recorded.

As well there was a record number of completed residential projects in buildings of the same characteristic, jumping 72% from this time last year. At 509,000 units, with the exception of February 2019 was the highest since 1987.

The additional supply has created a glut which helped bring down rent prices to a median US asking rent of $1.937, which was also aided by biting inflation and economic uncertainty. This is the first year over year decline since March 2020, with the median US asking rent dropping 0.4% last month. However, rents in March 2022 were 17.5% above the year prior.

FINANCE

What happens if I file my taxes a day late? Can I file an extension after it?

US taxpayers have the entire year to organize their paperwork for their tax declaration with the IRS, but only a three-month window to file without penalties. The 2023 tax season runs from 23 January to Tax Day 18 April, normally 15 April but due to that date falling on a Saturday and Monday being a holiday taxpayers got a few extra days.

Certain taxpayers were given some extra time automatically after they suffered extreme weather events where they live or operate a business. But with the exception of those people, 2022 tax returns and unpaid taxes must be submitted by Tax Day, or if you need more time a request for an extension must be filed.

The 19th of April 2023 is “a day late and a dollar short” as the saying goes. No extension will be accepted, barring for those provided disaster relief by the IRS but special conditions apply for each specific extension declaration. Missing the deadline may incur penalties and interest accruing daily, the latter nearly double from the same time last year.

FINANCE

When is the IRS tax deadline for disaster area taxpayers in California, Alabama and Georgia?

Severe weather events from coast to coast have brought torrential rains and flooding to California, snowstorms to New York and tornadoes in the Midwest and South. The extreme weather events have prompted the IRS to grant filing extensions for certain counties in eight states, with counties in Indiana the most recent to be added. The other states include Alabama, Arkansas, California, Georgia, Mississippi, New York and Tennessee.

Extensions for the affected areas range from 15 May to 16 October 2023.

How you can apply for a tax extension in 2023

Tax Day is here! Filers must submit their 2022 income tax forms and pay any outstanding debt with the IRS. While you can get a reprieve from the former by requesting an extension, unpaid taxes are due no matter what. Failure to file or pay could incur penalties and interest.

Here is some information on getting an extension, but do so before midnight 18 April electronically, or have your documents postmarked before offices close today.

FINANCE

The list of refundable and non-refundable tax credits: the maximum the IRS can return to you

A tax credit is essentially a reduction and/or a rebate for taxes paid to the IRS. Tax credits in general can be split into two types: refundable and non-refundable.

It’s important when preparing your tax return to look into all the available tax credits that you may be able to claim. The credits will reduce the amount of taxes you owe dollar for dollar, and even put thousands of dollars in your pocket.

A look at tax credits available to claim on 2022 tax returns

The US tax code provides a number of tax credits that filers can claim that could reduce the amount of taxes you owe to zero, or even add to your tax refund to the tune of thousands of dollars. Below is a look at some of the ones available to claim on 2022 tax returns and how they’ve change from the previous year.

FINANCE

Requirements to get up to $7,000 for the Earned Income Tax Credit Refund

The 2023 tax filing season runs from 23 January to 18 April this year. Approximately 168 million Americans are expected to submit a 2022 tax return, the vast majority of which could receive a tax refund.

One of the ways that taxpayers have to get money back from the Internal Revenue Service is by using tax credits, some of which are refundable, meaning any money beyond what you owed in taxes gets tacked onto your tax refund. The Earn Income Tax Credit (EITC) is just one of those.

Taxpayers could pocket almost $7,000.

FINANCE

Is college tuition tax deductible? What is the American Opportunity Tax Credit (AOTC)?

The federal government offers the American Opportunity Tax Credit (AOTC) to students completing their first four years of higher education.

As the price of higher education continues to rise, the AOTC can provide some relief to students and their families in need of support.

Read our full coverage for details on who is eligible to claim the credit and how it can be claimed. 

FINANCE

Who is not required to submit a tax return in 2023?

Every year, millions of Americans are required to file a tax return with the Internal Revenue Service (IRS).

Although the vast majority of organizations and workers will go through the process of submitting a return, there are a few groups that are not required to report their income to the IRS.We took a look at these groups...

FINANCE

Why is the tax deadline on April 18 this year? Key facts

The tax deadline is usually on April 15 for individuals in the United States, and it has been so since 1955. However, this date has sometimes changed, as it has this year, when taxpayers are given until the 18th to file their returns.

As this report tells us, this happened because of a weekend and a holiday.

Wall Street sends slightly higher

Major US stock indexes posted modest gains on Monday, helped by financial and industrial shares, while investors braced for a heavy week of corporate results and comments from Federal Reserve officials that could give more insight into the path of interest rates.

Markets are gauging the health of corporate profits and the economy after several banks kicked off first-quarter reports with strong results last week.

Meanwhile, the New York Fed said its barometer of manufacturing activity in New York State increased for the first time in five months in April, helping solidify the case for the central bank to raise rates at its meeting next month.

"Markets are in a bit of a wait-and-see mode," said Angelo Kourkafas, an investment strategist at Edward Jones. "We have a lot of corporate earnings ahead of us and the Fed rate decision in a couple of weeks."

(REUTERS)

IRS urges taxpayers to pay electronically

If you are rushing to meet the April 18 deadline, the IRS recommends filing your return electronically. 

The office reminds taxpayers that IRS.gov provides last-minute tax return filers with the resources they need to get taxes done on time.

The website has resources ranging from tax preparation and refund tracking to tax law research and business topics. 

For last-minute filers, IRS Free File allows those who made $73,000 or less in 2022 to prepare and e-file tax returns for free. However, anyone can use IRS Free File to submit an extension of time to file regardless of their income. 

IRS set to look into free electronic option to file tax returns

It’s that time of year when taxpayers are rushing to file their income tax returns before the deadline.

There could be a new, free option to prepare taxes in the future. The IRS has been tasked with looking into how to create a government-operated electronic free-file tax return system for all. But this doesn’t sit well with the big tax-prep companies, according to ABC News.

Congress has directed the IRS to report in on how such a system might work.

The order came as part of the $80 billion infusion of money for the tax agency over the next 10 years under the Democrats' flagship climate and health care measure, known as the Inflation Reduction Act, that President Joe Biden signed last summer. It gave the IRS nine months and $15 million to report in on how it might implement such a program and how much it would cost.

Next month, the IRS will release the first in a series of reports looking into how it might be done.

Treasury Secretary Janet Yellen sees "soft landing" for US economy

I do think there’s a path to bring down inflation while maintaining what I think all of us would regard is a strong labor market. And the evidence that I’m seeing suggests we are on that path.

Are there risks? Of course. I don’t want to downplay the risks here, but I do think that’s possible.

Sec. Janet Yellen believes US can maintain strong labor market and reduce inflation

Treasury Secretary Janet Yellen sat down with CNN's GPS host Fareed Zakaria over the weekend to talk on several subjects affecting the US economy currently. One of the topics that has been at the forefront of many dining room table conversations is inflation.

The Federal Reserve has raised interest rates aggressively over the past year to rein in rising prices. One of the consequences of that policy is that it would weaken the labor market.

However, she believes that the recent banking crisis may now do some of work for the Fed in slowing prices, thus reducing the need for further increases. She believes that the US can maintain its strong labor force while at the same time bring inflation under control.

FINANCE

Prices increased 0.1 percent in March: Which goods and services are driving inflation?

Prices slowed their growth in March, only rising 0.1 percent, bringing the year-over-year change in the CPI down from six to five percent. Housing continued to be a major driver of inflation, a worry for some economists who predict that higher rates could continue to push home prices up. 

Combined with the increases seen in January and February, inflation has officially hit one percent this year. Markets are likely to respond positively, given the newest report is a major sign that inflationary pressure may be disapating. 

Read more on which goods and prices saw changes in their price in March in our full coverage. 

Mortgage rates fall for fifth consecutive week

Mortgage rates inched down once again for the fifth week in a row. The average 30-year fixed-rate mortgage was 6.27% for the week ending 13 April according to Freddie Mac..

WELFARE

Requirements to earn the maximum benefit of $4,555 from Social Security in 2023

This year, the SSA applied an 8.7 percent Cost-of-living adjustment (COLA) increase to American benefits. The COLA is calculated each year to help payments maintain their purchasing power with inflation, which has been particularly high the last 18 months.

Once the COLA was applied, the average retiree payment increased to about $1,830 a month. However, some are set to receive more than $4,000. Let’s see who qualifies.

WELFARE

Social Security reveals when funds will run out for benefit payments

According to a report by the Social Security Board of Trustees, funds for the United States' Social Security program are due to run out in under a decade's time unless more money is apportioned to it.

AS USA's Corina González and Oliver Povey have the full story.

Welcome to AS USA’s live blog on the latest financial news

There’s no more time to delay, it's officially Tax Day! The 18 April deadline to submit your tax returns and pay any taxes due to the IRS. We'll give you some reminders and tips to help the process go smoothly. As well as information on changes for the 2022 fiscal year.

Plus we will give you the latest figures on the economy after more inflation data was released last week and other financial news.