Relief checks 2023 | Summary news 11 April
Headlines: Tuesday 11 April, 2023
- IMF warns that troubles in the financial sector could harm global growth
- Federal Reserve unlikely to cut interest rates
- Gas prices continue to rise
- US added 236,000 jobs in March, leading to a small decrease in the unemployment rate to 3.5%
- Payroll in the retail sector has fallen by 15,000 workers over the last year
- Weekly first-time jobless claims drop 18,000 to 228,000
- Over 3 million layoffs in the US this year, which sectors have seen the highest job cuts?
- Social Security and Medicare Trustees warn of respective funds depleted by 2031 and 2033
- Various states will continue to issue inflation relief checks and generous tax refunds in April
- Social Security April payment schedule: when can you expect your payment?
- No Supplemental Security Income checks will be sent in April; instead, the April payment was made on 31 March
- IRS offers a tax credit to filers with dependents in other countries
As of January 23, the Internal Revenue Service (IRS) began to receive and process tax returns for the 2022 fiscal year with a 168 million of taxpayers expected to file a income declaration.
Nearly three months into the tax season, the agency is preparing to close the window for timely submission of tax documents, with the deadline to file your income tax return coming Tuesday 18 April.
With the 2023 tax season drawing to a close, here are two mistakes to avoidwhen requesting your IRS refund.
Legally separating or getting divorced can bring with it changes to how you file your taxes, like what your filing status is. Also, depending on when the legal agreement was finalized it will also affect whether the payments must be reported on a federal tax return.
Here's a look at what you need to do on your federal tax filing with the Internal Revenue Service.
The expiration of temporary tax laws put into place during the covid-19 pandemic has changed how charitable contributions can be deducted.
If you’ve ever taken the time to take a look at your paycheck, you’ll see that your take-home pay is reduced by a fair amount from what you actually earn. Depending on your job there are a number of deductions listed that could be for healthcare coverage or retirement plans through your employer, for example.
But all paystubs will list taxes both federal and state at a minimum, as well as Medicare and Social Security. Sometimes these are grouped together under the label FICA (Federal Insurance Contributions Act). Other times they are separate but instead of Social Security you may see OASDI or OASDI/EE.
What do Social Security’s OASDI taxes pay for?
As the name suggests, ‘Old-Age, Survivors, and Disability Insurance’, the money paid into these programs which goes toward three types of beneficiaries. The majority of the money that the SSA pays out goes to retirees, who can begin to claim benefits when they turn 62 but should take into account that early retirement could knock 30 percent off monthly payments.
Disability benefits (SSDI) provide payments for those who are unable to work, or whose capacity to work is limited, due to a disability. Beneficiaries can be the worker who has contributed a sufficient amount to the program or family members of a contributor.
Survivor benefits may be paid to certain eligible family members of a contributor who is deceased. The amount depends on the age of the family member and whether or not they have a disability.
If you have not completed the procedure yet and during the last year you had an emergency or medical expense, you should know that the IRS allows you to deduct these expenses on your tax return.
Get EITC and other tax credits with free tax help
If you are eligible to receive Earned Income Tax Credit, you may also avail of free assistance in filing your tax return.
The IRS's Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free basic tax return preparation to qualified individuals.
VITA sites offer free tax help to people who need assistance in preparing their own tax returns, including people who make $60,000 or less, persons with disabilities, and limited English-speaking taxpayers.
The TCE program offers free tax help, particularly for those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors.
Advocates for patients and consumers push for more protections
According to a KHN-NPR investigation, over 100 million Americans have health care debt nationwide, which has become a crisis for many. More than 50 groups have called on the IRS and the Consumer Financial Protection Bureau to implement measures to protect patients and consumers from the harm that can result from medical debt.
They are advocating for debt incurred for medically necessary care to be prohibited from appearing on consumer credit reports. They also want the IRS and federal government to crack down on certain practices by nonprofit hospitals of denying medical care to people with delinquent bills. As well as acting like for-profit hospitals by selling patient debt to collection agencies.
Furthermore, the advocate groups want the IRS to issue a set of unified rules that would establish common standards for charity care that would be applied uniformly across nonprofit hospitals. The lack of which creates widespread confusion which leaves people who should qualify for charity care with large bills instead.
Outstanding debts of all kinds can negatively impact your credit score hurting your chances of getting a loan, pushing up the interest rate you pay, being able to buy or rent a house and more. That can cause harmful stress, which can aggravate ill health.
That’s why measures are being taken tokeep medical debt from affecting your credit score so that recovering from an illness isn’t made harder by debt incurred to get treated.
Big banks expected to report billions in deposit flight
The biggest banks in the US are projected to share that their clients withdrew up to $100 billion at the start of the year, even after acquiring new customers following the failure of Silicon Valley Bank, according to the Financial Times.
The banks include JPMorgan, Bank of America, Citi, and Wells Fargo.
Deposits usually serve as the cheapest source of funding for banks. The large banks have been seeing an increasing number of withdrawals over the past year as the Federal Reserve increased its rates.
Social Security experiencing 'worst crisis' says labor union
The Social Security Administration “is in the midst of the worst public service crisis in memory caused by historic levels of employee attrition due to uncompetitive pay in benefits, exceedingly low employee morale, and overwhelming workloads,” according to Rich Couture, Council 215 president at the American Federation of Government Employees.
The service delays facing the program’s approximately 67 million beneficiaries are signs of “an agency in crisis,” according to Couture.
Union leaders spoke out about the Social Security Administration’s diminishing services amid funding constraints that have lasted for more than a decade.
Social Security beneficiaries now confront long waits for service on the phone and in person at the agency’s field offices, as agency workers face low staffing levels.
Increased funding for the program, as well as stronger policies to help retain workers, may help, according to the union.
IMF: Financial turmoil could damage global growth
The International Monetary Fund has trimmed its 2023 global growth outlook slightly as higher interest rates cool activity but warned that a severe flare-up of financial system turmoil could slash output to near recessionary levels.
The IMF said in its latest World Economic Outlook report that banking system contagion risks were contained by strong policy actions after the failures of two US regional banks and the forced merger of Credit Suisse. But the turmoil added another layer of uncertainty on top of stubbornly high inflation and spillovers from Russia's war in Ukraine.
"Uncertainty is high and the balance of risks has shifted firmly to the downside so long as the financial sector remains unsettled," the Fund added.
The IMF is now forecasting global real GDP growth at 2.8% for 2023 and 3.0% for 2024, marking a sharp slowdown from 3.4% growth in 2022 due to tighter monetary policy.
The IRS offers multiple deductions available for disabled Americans but there can also be situations where these benefits can be subject to taxation.
Social Security disability payments vary for each individual and are calculated in a similar fashion to retirement benefits.
These payments are only taxed if you are receiving enough to be over a threshold of $25,000. The vast majority of recipients do not receive that much support.
Oliver Povey gives us a number of disability tax benefits that can be applied for when you file your taxes.
Call to stop Credit Suisse layoffs
Credit Suisse and UBS must freeze any layoffs planned as part of their merger, the Swiss Bank Employees’ Association said in an open letter to the Swiss parliament.
The association has written to lawmakers to demand they consider staff affected by the collapse of Credit Suisse and stop any job losses until the end of 2023.
“We ... call on you to support our demand for a freeze on layoffs by the end of 2023 in parliament,” SBPV managing director Natalia Ferrara wrote in the letter.
The Swiss parliament is slated to meet in an extraordinary session on Tuesday to discuss the state-backed rescue of Credit Suisse.
Extreme weather events from coast to coast across the United States have prompted the IRS to grant filing extensions for certain counties in seven states. Extensions for the affected areas range from 15 May to 16 October 2023.
The IRS will automatically identify the taxpayers who are in those areas and apply filing and payment relief. But, as Greg Heilman tells us, they will still need to indicate on their tax forms which natural disaster applies when claiming a loss.
Don't miss out on tax credits even if you're not required to file a return
You may want to file a tax return, even if you aren’t required to do so. By not filing, you could be missing out on refundable tax credits or an income tax refund.
This could apply to you if you have had federal income tax withheld from your pay, have made estimated tax payments, and qualify to claim refundable tax credits.
Barring a recession, Fed unlikely to cut interest rates
The US economy, while beginning to see some headwinds, keeps showing its resilience in the face of rate hikes from the Federal Reserve. Last month, 236,000 new jobs were added, slightly less than predicted but still strong. And wages grew at a slower but robust pace of 3.2%. Meanwhile, inflation is still more than double the policy target of 2% for the central bank.
While Mark Zandi, chief economist of Moody's Analytics, is forecasting that inflation will moderate, it won’t be until this time next year that it drops to where the Fed would feel comfortable with it. In his opinion, he would be “very surprised” if policymakers began cutting rates in the second half of this year. With the strength of the US economy, the bar is “very high” for the Fed to cut interest rates. A recession would be necessary with numerous job losses coming rapidly.
The IRS offers a tax credit for buying an electric vehicle as an incentive to promote the use of more energy-efficient vehicles and lessen reliance on fossil fuels. Electric cars produce zero emissions, which helps to reduce air pollution.
If you bought a plug-in electric or fuel cell vehicle this year, you may be eligible for a clean vehicle tax credit of up to $7,500.
Unlucky if you hoped you could claim this, but under no circumstance can a spouse be claimed as a dependent, even if they have no income. Furthermore, the Tax Cuts and Jobs Act of 2017 eliminated personal exemptions for tax years 2018 through 2025.
Married taxpayers cannot use the Head of Household status in the event that their spouse doesn’t work. In order to file a tax return as a Head of Household you must be unmarried or considered unmarried along with having a dependent child.
Gas prices in the US are continuing to rise, 8.8 cents since last week, as the weather warms and Americans take to the road. Additionally, OPEC nations announced a surprise reduction in production last week. According to GasBuddy data the average price of gasoline has jumped to $3.57 per gallon. However, it is over 50 cents per gallon cheaper than a year ago.
The upward trend is expected to continue through the spring before tapering off in the summer months with cheaper blends available and refining capacity coming back online.
The Internal Revenue Service opened the window to start filing income tax declarations for the 2023 tax season on 13 January this year and began processing returns ten days later. The deadline to turn in a 2022 income tax return is Tuesday 18 April for most US taxpayers, but for some who were affected by severe weather events, they have received an automatic extension.
Any taxpayer who is not covered by one of those disaster declarations and thinks they will need more time, will need to apply for an extension from the IRS.
The 2023 Tax Season will wrap up for most US taxpayers on Tuesday 18 April 2023. That is the deadline to submit 2022 income tax returns. However, due to extreme weather events some filers have been granted an automatic extension. Those that cannot make the deadline must apply for an extension by that date, which will give them another six months until 16 October.
But unless you are in one of the disaster declaration areas that received an automatic extension from the IRS, you’ll still be on the hook for any money they may owe. You need to pay any balance due, to the best of your knowledge, that you owe by Tax Day.
Missing the tax deadline and filing your tax return late can be an expensive proposition if you owe money to Uncle Sam. You could face penalties for filing late as well as late payment penalties and interest to boot.
Welcome to AS USA’s live blog on the latest financial news
There’s only a week to go before the April 18 deadline to file your tax returns. We give you some reminders and tips to help the process go smoothly.
Plus, the latest figures on the economy and other financial news.