Relief checks news summary | 31 March 2023
US finance news: live updates
Headlines | Friday 31 March, 2023
- IRS tax deadline approaching - info on requesting an extension
- Deadline is Tuesday 18 April for most US taxpayers
- Fed's preferred inflation measure lower than expected for February
- Fed yet to firm up view on May interest-rates hike
- March jobs report due to be released next week
Tax season 2023: useful information:
- Top tips to avoid errors when filing your tax return
- The difference between ‘accepted’ and ‘approved’ tax returns
Related AS USA news articles:
The price of purchasing a new or used car shot up in the wake of the covid pandemic, and the disruption it caused is expected to linger for some time still.
Federal Reserve preferred inflation measure lower than expected
Personal Consumption Expenditures Price Index (PCE) for February came in lower than expected of Friday. The Commerce Department reported Friday that core inflation, excluding food and energy, increased 0.3% for the month.
While inflation at is still higher than policymakers’ target, the latest data is good news for those hoping that the Federal Reserve will end interest rate hikes sooner rather than later. The PCE gives a fuller picture of costs for consumers, especially the core rate, making it the Fed's favored inflation gauge.
US jobs report out next week could affect Federal Reserve interest rate policy
The Labor Department’s jobs report for March is due out next week and economists are predicting that the US economy added another 240,000 payrolls. That would be a drop from the previous month, but the 311,000 in February blew past expectations and sparked worries of a more aggressive rate hike by the Federal Reserve.
While those concerns were warranted, the collapse of two banks the same day as the February jobs report and the subsequent turmoil stayed policymakers’ hand. In the end the Fed only raised rates by a quarter percentage point.
Should the US economy miss the forecast and come in lower, investors could start betting on the central bank rolling back rates by the end of the year.
Decline in home prices and mortgage rates attracts buyers, supply an issue
New Redfin data shows that more potential homebuyers are taking the first steps at purchasing a house with its Homebuyer Demand Index hitting the highest level since May last year. The number of people requesting tours and other buying services jumped as home prices and mortgage rates continue to fall.
The median home sale price across the nation decreased for a sixth straight week now at $360,500. Over half of the nation’s 50 most populous metro areas saw price declines.
Mortgage rates, while still over double historic lows before the Federal Reserve began aggressive monetary tightening, dropped for a third week in a row with the average 30-year fixed mortgage rate at 6.32% for the week ending 30 March.
However, sales haven’t picked up hindered mainly by a lack of supply confronting would-be buyers. Many homeowners are reluctant to sell having locked in rock-bottom mortgage rates.
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.
The IRS offers extra credit to taxpayers who can show that they use at least half of their wealth on dependents, whether they are US residents or not.
Through the Credit for Other Dependents, the IRS offers $500 dollars to all those taxpayers who demonstrate a minimum contribution of 50% in financial support or maintenance to family members.
This means that if you live in the United States and every month you send money to support family members in Mexico or Canada, you may be eligible for a $500 refund from the IRS.
Daniela Barrera tells us more about how to claim this credit.
Despite automation, telephone operators are in high demand all over the country, with thousands of listings for openings in various job websites. Jooble has more than 780,000 active vacancies listed.
The hourly wage and average salary of phone operators in the U.S. can vary depending on several factors, such as the industry they work in, their level of experience, and the region in which they work.
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.
Stocks end the week higher
The stock market ended the week and the quarter on a high note, following another Federal Reserve rate hike and some financial panic in the wake of the failure of Silicon Valley Bank.
The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all ended higher, with Nasdaq posting its best quarter since 2020.
The market got a boost after the Personal Consumption Expenditures index showed a lower-than-expected increase in prices.
Free tax filing options for eligible seniors
The IRS reminds seniors and retirees that they can file their taxes for free or find free in-person tax help. They can look at a few programs available for eligible taxpayers on the IRS website.
The Tax Counseling for the Elderly program prioritizes taxpayers aged 60 and older. TCE specializes in questions about pensions and retirement-related issues unique to seniors.
The Volunteer Income Tax Assistance program is generally for people who make $60,000 or less, people with disabilities and limited English-speaking taxpayers.
Workers Compensation is an important safety net for employees when they are injured on the job or as a result of their job.
Workers comp pays an employee’s medical bills and a percentage of wages, among other things. 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.
Rules vary from state to state for the number of employees a business has that will trigger coverage requirements, as well as how the coverage works. Oliver Povey takes a look at workers compensation in 2023.
The value of the IRS’ solar panel tax credit has increased. To encourage the use of renewable energy, the United States will offer a reimbursement of up to 30% for households that install solar panels in the form of a tax credit.
The value of the Federal Residential Solar Energy Credit was raised through the passage of the Inflation Reduction Act from up to 26%, as had been offered in 2020 and 2021.
The tax credit, which can be claimed when one files their income tax return, discounts the cost of installing a solar panel by the taxpayer.
When considering eligibility, different details must be taken into account. Alejandro Martin explains what they are in this story.
A city in California has launched a new guaranteed income program that would last one year, for eligible people who have been affected by the 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 that the city will issue.
AS USA's Rodrigo Serrano tells us about the requirements for those who want to apply for the assistance.
New Yorkers hit by severe weather get deadline extension for taxes
Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area.
Some parts of California hit by severe weather are eligible for an extension of the deadline to file taxes, and qualified residents of New York can apply as well.
Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Both individuals and businesses in a federally declared disaster area can get a faster refund by claiming losses related to the disaster on the tax return for the previous year, usually by filing an amended return.
FDIC wants portfolios of failed banks sold
The Federal Deposit Insurance Corporation has retained advisers to sell the securities portfolios that the new owners of failed Silicon Valley Bank and Signature Bank rejected, according to people familiar with the matter.
The portfolios are composed of low-yielding assets, such as Treasuries and U.S. government agency-backed securities, that the two regional banks amassed while interest rates were close to zero.
If First Citizens Bancshares, the new owner of Silicon Valley Bank, or New York Community Bancorp, which acquired Signature Bank, had assumed the assets, they would have had to realize losses given that interest rates are now much higher than the yield of these assets.
Silicon Valley Bank's and Signature Bank's securities portfolios carry a face value of around $90 billion and $26 billion, respectively, according to regulatory filings and statements by government officials.
It is unclear how much the FDIC's deposit fund stands to lose on the sale of the portfolios. The fund, used to guarantee deposits at failed lenders, is replenished by a levy on all U.S. banks that are members of the FDIC's deposit insurance scheme.
When is the March jobs report published?
The Bureau of Labor Statistics is scheduled to release its monthly jobs report for March next week, at 8:30am ET on Thursday 7 April.
Unemployment in the US currently sits at 3.6%, up from 3.4% in January.
The slight rise in unemployment came ahead of the Federal Reserve’s ninth consecutive interest-rates increase earlier this month, as the body seeks to quell inflation in the US. March's jobs report will provide another key indication as to whether the labor market is now suffering the effects of the Fed’s repeated rate hikes.
Check out the Bureau of Labor Statistics’ jobs report schedule.
There are two main healthcare programmes offered to Americans who may otherwise struggle to get insurance coverage, but they are organised in very different ways.
Those who wish to apply for Social Security Disability Insurance must pass a five-step evaluation to measure their disability.
AS USA's Gidget Alikpala has all the details on the process.
Don't fall for IRS phishing scams
As the tax deadline approaches, the IRS is reminding US taxpayers to be vigilant as email and SMS scammers attempt to trick people into handing over their personal information.
The agency has put together an info sheet on the most common ruses to be on the look-out for.
After yesterday's announcement that Donald Trump has been indicted over a 'hush-money' payment to adult-film star Stormy Daniels, we're running a live blog on the latest developments in that breaking story.
Follow the latest updates on the former president's indictment.
If the IRS has informed you that your tax return has been accepted after you submitted early, it does not necessarily mean your tax refund is on its way.
No view yet on May interest rate hike - Fed's Barkin
Richmond Federal Reserve bank president Thomas Barkin said Thursday that he had not come to a view yet on what rate increase might be appropriate at the Fed's May 1-2 session, and is "comfortable" with meeting-by-meeting decisions on whether or not to move by a quarter of a basis point.
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."
Inflation, meanwhile, "is still very high. The job market is still really tight," he said in comments to the Virginia Council of CEOs.
"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. "It is pretty hard to know here on March 30."
"I'm comfortable with the trajectory we're on now - meeting by meeting, whether you need a 25 basis point hike or not," Barkin said. "You'll never get it perfect but if you are not quite right you're not going to get it that far wrong."
The Fed raised interest rates at its last meeting by a quarter of a percentage point, to a range between 4.75% to 5%, and indicated further increases would hinge on whether credit tightened appreciably in the wake of recent bank failures.
If you're wondering what tax bracket you fall into, AS USA's Maite Knorr-Evans has the info you need.
If you don't get your tax return in on time, the IRS may well hit you with penalties.
When is the 2023 IRS tax deadline?
For most US taxpayers, the deadline to submit your 2022 annual tax return is Tuesday 18 April - giving you three days longer than usual.
15 April is normally Tax Day in the US, but when it falls on a Saturday, it is pushed back to the nearest working day.
Monday 17 April is the District of Columbia's Emancipation Day holiday, forcing the IRS to go with the 18th this year. "By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way as federal holidays," the agency explains.
US finance news, live updates: welcome
Good morning and welcome to our finance news live blog for Friday 31 March 2023, which will be providing you with key information and updates as US taxpayers prepare to submit their annual tax returns.
We'll also be covering the measures being adopted in the States to help Americans cope with the effects of inflation, as well as other topics such as Social Security payments and the housing market.
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