Relief checks news summary | 25 January 2023
Headlines | Wednesday, 25 January 2023
- Number of states still offering inflation relief payments this month
- 50,000 workers will be affected by tech layoffs
- Median home price in the US rose to $386,300 in 2022, breaking previous record high
- California to send one last batch of inflation relief checks in February
- Sen. Manchin says Democrats need to negotiate over debt ceiling increase
- Will there be cuts to Social Security and Medicare during debt ceiling talks?
Tax season 2023: Top tips
- Watch out for these tax-filing changes for 2023
- Will I get a tax refund?Average refunds will be smaller this year
- Own an EV? Here's how to claim a Clean Vehicle Tax Credit
- Tax season 2023 gets underway - How to file electronically
- What are the eligibility requirements for the Child Tax Credit this year?
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Amazon has launched its own online pharmacy, RxPass, but in order for customers to get the savings the retail giant is offering requires a Prime membership.
Are you eligible for the Amazon's RxPass program if you have Medicare or Medicaid?
Amazon already offered some medications online through its Amazon Pharmacy, but the retail giant has now launched a new service as an add-on to its Prime subscription service. Its new RxPass will give customers access to around 50 generic prescription drugs for a flat fee of $5 a month, to fill as many prescriptions as they need.
The online retailer says it restricts eligibility for the program based on insurance and the state where the medications will be shipped. Currently, it cannot ship medications to California, Louisiana, Maryland, Minnesota, New Hampshire, Pennsylvania, Texas, and Washington.
Read more on the program in our full coverage.
Advice for protecting yourself when using P2P apps to send money
Peer-to-peer (P2P) payment apps such as Apple Cash, Cash App, Venmo, and Zelle have turned into everyday tools for millions of Americans. According to a survey by Consumer Reports, nearly two-thirds use a P2P app to send money to other individuals to the tune of over $1 trillion.
While these services offer clear benefits they can also be confusing and hard to decipher how they work, not to mention what risks are posed when using them as well as choosing which one is best for you. For that reason, Consumer Reports has developed the Fair Digital Finance Framework, a set of criteria and procedures for evaluating a range of digital finance products and services.
If you use a P2P app to send money you may want to check it out to see how to keep you, your money and personal information safe as well as inform your loved ones that may not be so tech savvy, even though they think they are…
Where women's pay stands compared to their male counterparts
While women have been gaining in pay equality over the years, the last year saw a slight retreat, dropping a tenth of a percent to 83% of the median for men. “In 2022, median weekly earnings for wage and salary workers who usually worked full time were $1,059. Median earnings for women were $958, or 83.0 percent of men’s earnings,” according to the Bureau of Labor Statistics.
Equal Pay Day, the date symbolizing how far into the following year the average woman must work to have earned as much as the average man did the year before, is expected to fall on 15 March again this year.
After the 2021 American Resuce Plan, families were able to claim a larger Child Tax Credit. While there are still some in Washington, on both sides of the aisle, who would like to see the program extended, no bills have been introduced. The impact of this inaction means that taxpayers with dependents will receive a smaller credit valued at $2,000.
Read our full coverage for details on how the value of the credit is determined.
Jeenah Moon / Bloomberg
Wall Street crawls back from early morning loses on Wednesday
The three major indexes all dropped in early morning trading with only the Dow Jones Industrial Average eking out a minimal gain. The pessimism was driven by Microsoft’s “dour guidance” given during its fourth quarter earnings report which raised red flags about its megacap peers which have yet to report.
The tech giant weighed down the Nasdaq which managed to almost recover from a 242 point drop at the start of trading from the day before. By 4 pm the tech laden index was down just under 21 points or 0.18%.
"We’ve had up and down days, that indicates an ongoing tug-of-war. The dour guidance good news from the standpoint of what the Fed is doing is working," Chuck Carlson, chief executive officer at Horizon Investment Services told Reuters. "That outcome has become the catalyst for the market one way or the other. Earnings matter but what’s really got the market’s focus is the Fed interest rate/inflation story."
The Internal Revenue Service began accepting and processing 2022 tax returns 23 January, and American taxpayers will have until 18 April 2023. While the agency expects most filers to get a refund, it warned that they might be smaller than in the past couple of years as covid-19 relief programs have come to an end.
However, to make sure that you get all the tax credits and deductions that you have coming your way to potentially increase your refund, or barring that, paying less taxes, there are a number of tax software programs. The top providers have both free and paid versions of their services that can make the process of submitting your 2022 tax return easier. Additionally, many have apps that allow you to use the software on your smartphone or even a tablet.
Read our full coverage for a look at the best software available in 2023 .
The state began distributing the Middle-Class Tax Refund in late October and to date 7.1 million have been sent out via through direct deposit, with an additional 9.4 million on pre-paid debit cards.
The California Franchise Tax Board (CFTB) estimates that in total more than 31 million residents have benefited from the tax credit and that the program cost the state just over $9 billion. If you are yet to receive yours, there is one more batch of payments to be sent.
Here's when that money could arrive...
An analysis of date from the IRS shows just how much money you need to earn to be in the top one percent in the US. While to enter into the elite club nationally you will need to have income well in excess of half a million dollars per year, but for a significantly smaller amount you could be the crème de la crème in some states.
However, that more modest income wouldn’t be even half of what you’d need to be considered a one-percenter in other states. This just highlights results of another study to just how much the wealth gap between the have and have-nots has grown.
Here’s a look at what it takes to enter the top one percent.
Thanks to the Inflation Reduction Act, folks who purchase electric vehicles can receive a federal tax credit of up to $7,500 per vehicle, allowing millions of consumers to ditch the pump and easily switch to an EV
As part of the Inflation Reduction Act, the IRS is offering a $7,500 credit when you file, but who is it for and how do you apply? Find out how to apply for the tax credit...
The Inflation Reduction Act passed by Congress and signed into law by President Joe Biden in 2022 included a modification to the federal tax credit for Americans who purchase an electric vehicle. The new rules for the $7,500 IRS credit only apply to new vehicles purchased after 1 January 2023 but if you bought a car last year, your EV may qualify for the prior rules.
One major change to the Internal Revenue Code Section 30D, which the credit falls under, is that the electric vehicle must have its final assembly be in North America, this also applies to vehicles bought last year after 16 August. There are a few other requirements in order to qualify for the credit. We’ll walk you through what those are and how to apply for the credit.
Amazon becomes the latest company to infiltrate the lucrative healthcare sector with its new offer of a drug discount programme.
Named RxPass, people with Prime memberships can pay an extra $5 a month to receive prescriptions from around 50 basic medications. The website gives an example of Lisinopril, used to treat high blood pressure, with a marker next to it indicting it as Included with RxPass in a similar way to how movies on Prime Video has the marker for free films to watch.
But is it ethical for big companies to be cashing in on healthcare at Americans' expense?
In short, senior citizens are largely subject to the same tax requirements as other adults. There is no age at which you no longer have to submit a tax return and most senior citizens do need to file taxes every year.
However if Social Security is your only form of income then it is not taxable. In the case of a married couple who file jointly, this must be true of both spouses.
In fact if your taxable income is below $14,700, or $27,300 for married couples, then you will not be liable to pay income tax on those earnings and will not be required to file a tax return.
Social Security potentially in the firing line
Republicans are leaning towards the route of cutting Social Security support. Laid out in the Republican Study Committee budget is a list of cost-saving measures such as raising retirement age. This would not be signed off my the President nor the Democrat-controlled Senate.
“I’ve got 60% of my population that that’s all they have is Medicare and Social Security,” Manchin told NBC’s “Meet the Press”. “You think I’m going to go down that path and put them in jeopardy? No.”
The Republican-controlled House of Representatives is so far refusing to budge on the debt ceiling. As Congress controlls the upper limit of debt the Republicans in control of half means they can stop the Democrats raising the limit. In practice, this could mean the US defaulting on its international debt as soon as June.
If the limit is not raised then cuts can be demanded to keep the debt limit below the threshold. However, the US has never defaulted on its international debt by means of its debt ceiling. It has always been increased when it has needed to be so expect that outcome again.
The deadline to get your 2022 tax year return in by is Tuesday, 18 April. Some groups, like victims of the recent winter storms in parts of California, Georgia and Alabama, have seen their deadlines extended to Monday, 15 May.
But when is the best time to submit your return? Like with most things, getting your affairs in early can save you a lot of hassle...
What are the changes for tax season 2023?
Every year tax-filing season rolls around again, but every year there are a few changes that filers need to bear in mind. Tax refunds are expected to be smaller this year after the various pandemic-era relief programs, many of which were overseen by the IRS, have expired.
This video from the Today Show should keep you up to date for your 2023 tax returns...
One of the most widely-utilised is the Child Tax Credit (CTC), which provides a tax break for families with qualifying children. Even low-income individuals not usually required to file taxes can claim the support.
But can you claim it alongside benefits programs like Social Security and Supplemental Security Income? We take a look...
House GOP hold the key to debt ceiling increase
Senate Minority Leader Mitch McConnell appears willing to let his colleagues in the House of Representatives take the lead on negotiations with the White House over the debt ceiling. The GOP is in the minority in the Senate but holds a narrow majority in the House, meaning that Biden will need to convince some to vote for the proposal to secure passage.
Republicans in the Senate likely support extracting concessions from Democrats over the debt ceiling but, without a majority, they have little leverage. The White House remains insisted that a debt limit increase must be passed without future spending cuts.
Top tips for tax season 2023
More than 168 million individuals are expected to submit their tax returns in the coming months, but the IRS is still attempting to work throught the backlog of unprocessed returns from previous years. If you want to speed up the process and hopefully receive a tax refund ahead of time, here's some top tips to ensure you fly through your tax returns this year...
Tax season came be a stressful time for filers, but it does at least result in a refund for tens of millions of Americans. But that little annual cash boost may be slightly underwhelming this year as experts warn that the average refund will be lower than in recent years.
Here's why that could be the case, and how much you can expect from the IRS...
When is the tax return deadline?
Tax season 2023 has now begun, meaning that the IRS is now accepting and processing tax returns for the 2022 tax year. Those required to file a tax return with the IRS have until 18 April to submit their filing, but getting it out of the way earlier will save that late rush and could ensure that you get your refund earlier.
Sen. Schumer calls for specifics on GOP spending cuts
The matter of rasing the debt ceiling has come to the forefront in the past week as the United States has reached the statutory limit on debt. This leaves the country unable to borrow any more money and the Treasury has been forced to resort to extraordinary measures to ensure that the US does not default.
However these measures will only last until June and Congress needs to raise the debt ceiling to ensure that the US can keep up with its financial obligations. Failure to do so would be catastrophic for the United States and the entire global economy.
The Social Security Administration was established in 1935 to provide financial support for retired workers who contributed to the program through taxes on earned income. Additional programs have been added over the years to cover benefits for disability, survivors and those with limited financial means.
While the standard amount of credits a worker must obtain to apply for retirement benefits is 40, each program has its own requirements. Here’s a look at how long you need to work in order to qualify for Social Security benefits.
Parties must negotiate on debt ceiling, Manchin says
Congress is now facing the task of agreeing to a resolution to the debt ceiling issue after the country hit the upper limit of debt last week. The debt ceiling is defined by Congress and the two Houses need to come together to approve an increase to avoid a damaging default.
Sen. Joe Manchin, one of the most centrist members of the Democratic caucus, said that he wants to two parties to work on finding a bipartisan solution. The White House is insistent that Congress must pass a raise without conditions.
California has been hammered by storms in recent weeks, brought about by a weather phenomenon known as an atmospheric river. In a state that has been experiencing a historic mega-drought for the past two decades, such severe rain has left some areas devastated and killed at least twenty-two people.
In response, the IRS has decided to extend tax season for residents of hard-hit counties, giving filers in those areas more time to submit their returns without facing penalties.
White House rejects debt ceiling negotiations
"Like the President has said many times, raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos. Congress has always done it, and the President expects them to do their duty once again. That is not negotiable.
As for the broad economic debate in our country, the Speaker and his allies have said that they have a fiscal plan to cut Social Security, cut Medicare, cut other vital programs, and impose a 30 percent national sales tax."
What was the 2011 debt ceiling crisis?
Republicans have recently flipped the House of Representatives and are looking to use that control to pile pressure on a Democratic President, still in his first term in office, who passed a controversial spending package the year before. Sound familiar?
Not only is that the situation that Washington finds itself in now, but it was also the context for the debt ceiling crisis of 2011. The United States came closer to defaulting on its debt obligations than it has done in decades, before a compromise was eventually struck. There are concerns that this time around, with Congress increasingly partisan, tensions could be raised even further.
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With tax season 2023 now well underway, we'll be keeping you in the loop about tax credits, applicable deductions and other tips and tricks for income tax filing. In addition, we'll also have the latest on the debt ceiling negotiations and Biden's fight to implement widespread Student Loan Forgiveness.