Relief checks news summary | 26 January 2023
Inflation Relief: Latest Updates
Headlines | Thursday, 26 January 2023
- US economy grows by 2.9% in final quarter of 2022.
- 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?
White House releases comment on national ACA enrollment figures
Over the last few months, four out of five consumers looking for health insurance through the Affordable Care Act were able to find health care coverage for as little as $10 a month or less. These lower rates — which were originally delivered as part of my American Rescue Plan — were set to expire at the end of 2022, but thanks to the Inflation Reduction Act, we extended them and millions of families are continuing to save $800 per person per year on their premiums.
US saw real increase in GDP in Q4-2022
Even as the US experienced high levels of inflation last year, real GDP rose 2.9 percent in Q4-2022 (July, August, September). Understanding the time this data point comes from is important because it is just a few months after the Fed's rate increases went into effect.
In the following month, major tech companies began to announce layoffs, and markets began to slow. Additionally, the Federal Reserve still expects unemployment to increase this year, and the historical record shows that rate increases often create recessions 12-18 months after the hike begins.
Severe winter storms have ravaged California since late December causing flooding, landslides and mudslides affecting homeowners and businesses across the state. The extreme damage wrought has prompted President Joe Biden to approve a major disaster declaration in the Golden State.
The move frees up Federal Emergency Management Agency (FEMA) aid to those who have been affected in the counties of Merced, Sacramento and Santa Cruz.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/27HJQWCQXNAG5CYQGU2M3PO3E4.jpg)
Social Security Administration has begun sending increased monthly Social Security payments of more than $1,800. Here are the shipping dates in 2023.
One of the most popular tax deductions in the United States is the mortgage interest deduction (HMID). It is highly regarded among real estate agents, homeowners, would-be homeowners, and even accountants.
Unfortunately, the myth is frequently more appealing than the fact.
SHANNON STAPLETON / REUTERS
US Markets buoyed by strong GDP report
ll three major US indexes were up at the end of trading on Thursday after a volatile early morning. Investors were processing a barrage of economic data, including strong GDP growth countered by data showing the labor market is still tight, and mixed corporate earnings. All of which could indicate what the Federal Reserve will do next week when it meets.
The general consensus is that central bank policymakers will raise interest rates by a quarter percentage point which ha been priced into shares. However, not everyone is convinced.
"The economic data had something in it for everybody; for the dreamers who think the economy is just slow enough to put the Fed on hold and the pessimists who think growth is still too hot for the Fed to step away,” David Carter, managing director at JPMorgan Private Bank in New York told Reuters. "Hope is not an investment strategy, and the economic facts could soon weigh on the market. The biggest uncertainty is what will happen in the back half of this year," he added.
The US housing market saw major price increases during the pandemic as Americans rethought where they wanted to live who either changed their careers or no longer needed to go to the office to do their job. The mass migration aided by historically low interest rates distorted the valuation of homes leading to overheating in metro areas across the nation.
Now a time of reckoning is coming for some of those markets as the Federal Reserve jacks interest rates to bring down inflation that peaked in June but is still higher than it’s been in over forty years.
Mortgage rates drop to lowest rate in four months
Freddie Mac reported on Thursday that the weekly average of the most popular home loan, the 30-year fixed-rate mortgage dropped again to 6.13%, as of 26 January. That’s its lowest level in four months after peaking in late October and once again in early November at 7.08%.
Demand in the housing market had been decreasing, but “ample demand remains, fueled by first-time homebuyers.” The improving conditions for homebuyers, prices and borrowing costs dropping, has created a thaw in demand “from the months-long freeze that gripped the housing market.” However, “potential homebuyers remain sensitive to changes in mortgage rates.”
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...
With tax season just around the corner and ‘The Great Resignation’ in full wing last year, many workers may need to report their income from more than one W-2. Legally, employers are required to send out W-2s to all current and former workers, so do not feel uncomfortable asking for the form if you do not receive it by the end of February.
If your former employer has your address on file, they may mail you your W-2. The IRS says that collecting your W-2 through your employer is the easiest way to receive it, but if you cannot get in their contact, there are other options.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/LIR7V3MCLZTJ7H4ONWED63RZLM.jpg)
Starting next month, the employees of Walmart stores and warehouses in the United States will see an increase in their salaries with the aim of retaining and attracting workers to the company in a labor market that is highly competitive.
According to official information from Walmart Inc., the hourly minimum wage will increase from $12 to $14 an hour, reflecting pressure from large chains to raise wages in a battle for labor, according to experts in the field.
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.
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...
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...
What could the debt default damage be?
Mark Zandi, chief economist for Moody’s Analytics, estimated that the US would lose 6 million jobs, $12 trillion in household wealth and 4% of gross domestic product. The unemployment rate would double to 7%, putting an extra 2.8 million people out of a job.
“The US economy could suffer an economic hit comparable to the 2007-08 financial crisis and recession if the federal government defaulted on its debt,” The Hill’s Sylvan Lane wrote in analysing Moody’s report.
The upcoming debt ceiling debate, and its consequences, are being fiercely debated. While it is more than likely that an accomodation will be found, the US has never defaulted on its debt obligations, the longer negotiations take the more damage is done to the economy.
Economic analysts are already looking at the permutations leading up to default day in mid June.
US economy grows 2.9%, exceeds expectations
The economy grew at an annual rate of 2.9% in the last three months of 2022, official figures show.
That was down from 3.2% in the previous quarter, as home sales and construction tumbled.
Progressive Caucus statment on rental protections
In the absence of robust investments in fair and affordable housing, it is clear that additional timely executive action is needed to address the urgent issue of historically high rental costs and housing instability…We urge your Administration to pursue all possible strategies to end corporate price gouging in the real estate sector.
Rocketing prices a danger for all renters
Rent prices increased by 7.45% in the last year, the lowest in 15 months. However, that is still thriple the annual increase compared to two years ago. With interest rates at their highest since the 2008 financial crash there are preventative concerns that support is needed; landlords are likely to increase prices as their mortgages increase. Before the covid-19 pandemic, over 2 million eviction fillings and roughly 900,000 evictions occurred annually.
The White House has announced new plans to help people renting in a new communique. Named “Blueprint for a Renters Bill of Rights”, the statement lists some of the measures the administration wants to take on a federal level to help a burgeoning group of people as home-ownerships declines. Over a third of the American population, 44 million households, rent their homes.
Republican plans for Social Security
One of the proposals circulating on Capitol Hill would increase the full retirement age (FRA) to receive one’s maximum Social Security benefit from 67 to 70.
The change would only impact workers who will retire after 2040.
The Republicans point to declining worker-retiree ratios and longer average lifespans as justification for this change.
The IRS advises all filers to get their returns in as early as possible to avoid delays in the processing and distribution of tax refunds. A majority of filers are expected to receive a tax refund this year, and submitting your taxes early means you stand to receive your payment more quickly.
It also ensure that you have plenty of time before the 18 April deadline, just in case you find any issues when you come to submit your return.
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...
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.
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 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 .
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.
Welcome to AS USA!
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 some form of student loan forgiveness.