Relief Checks: Summary News 22 December
Headlines: Thursday, 22 December 2022
- Bipartisan agreement on $1.7tr spending bill to avert government shutdown, needs to pass by Friday
-2023 funding proposal provides protections for student-loan borrowers
- Wells Fargo pays $3.7 billion for charging illegal fees and interest
- Date set for Supreme Court to hear two challenges to Biden student loan forgiveness plan
- Inflation increased 0.1 percent in November & 7.1 percent year-over-year boost in prices.
- Federal Reserve continues to push up rates as inflation begins to slow
- Workplace fatalities increased by almost nine percent from 2020 to 2021
- Thousands of workers will see a raise thanks to increases in the minimum wage that take effect in 2023
Minimum wage in Texas
Wondering why Texas' minimum wage appears to be trending on social media right now? The state minimum wage rate in Texas is $7.25 per hour - the same as the current Federal Minimum Wage rate. The minimum wage applies to most employees in Texas, with limited exceptions including tipped employees, some student workers, and other exempt occupations.
The minimum wage in Texas was last amended in July 2008, when it was raised $0.70 from $6.55 to $7.25. According to the most recent data, 78,000 workers in Texas earned the federal minimum wage of $7.25 per hour in 2017 while 118,000 earned even less.
New changes for tax filing in 2023
There will be some changes in the next tax filing season.
The standard deduction for married couples filing jointly for tax year 2023 rises to $27,700 up $1,800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.
Some tax credits return to 2019 levels. This means that affected taxpayers will likely receive a significantly smaller refund compared with the previous tax year. Changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Credit.
Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year. For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022. The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.
Saver’s Credit for low- and moderate-income workers
Low- and moderate-income workers are being encouraged to start saving for retirement now and possibly earn a special tax credit in 2022 and years ahead. The Retirement Savings Contributions Credit, also known as the Saver's Credit, helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements, 401(k) plans and similar workplace retirement programs.
Eligible workers still have time to make qualifying retirement contributions and get the Saver's Credit on their 2022 tax return. People have until Tuesday 18 April 2023 - the due date for filing their 2022 return - to set up a new IRA or add money to an existing IRA for 2022. Both Roth and traditional IRAs qualify.
More information on the Saver's Credit is available on the IRS website.
Nasdaq plummets on fresh Fed interest rate hike worries
The Nasdaq index slumped by almost 3% on Thursday after a fresh batch of data showing a resilient economy fueled worries that the Federal Reserve would stick to its aggressive tightening path; with Micron's glum forecast adding to a downbeat mood. Apple Inc, Microsoft Corp and Amazon.com Inc fell more than 3% each, as two-year Treasury yields regained steam on prolonged rate hike expectations.
Meanwhile, a Labor Department report showed the number of Americans filing for state unemployment benefits increased to 216,000 last week, much below economists' estimate of 222,000, indicating a still-tight labor market. "The GDP data beat a lot of expectations. There are concerns that the economy is not giving up too easily and it's putting up a fight that will likely require the Fed to remain hawkish and keep interest rates higher for longer," Sam Stovall, chief investment strategist at CFRA Research in New York, said.
The Fed’s key benchmark borrowing rate is projected to rise another three-quarters of a percentage point in 2023, hitting a 17-year high of 5-5.25 percent from its current 4.25-4.5 percent level, according to the Fed’s median projection from December.
There are conditions in which a former spouse may claim social security support after a divorce. If an ex-spouse of yours makes a claim for SSDI spousal benefits, this will not affect any benefits you are receiving from the SSA.
If you are divorced, your ex-spouse can receive benefits based on your record, even if you have remarried, if...
Stephane Mahe / REUTERS
When will the COLA be reflected in my Social Security check?
The COLA kicks in with December 2022 benefits, which are reflected in January 2023 checks.
Social Security payments are paid on Wednesdays, according to a schedule determined by the beneficiary’s birth date. So, if you were born between the first and tenth of the month, your benefits will be paid on the second Wednesday of the month or January 11, 2023.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/UAN5RE5OPBFCXDKCJIUHQQMJWI.jpg)
The Social Security Administration in the United States released the greatest cost-of-living increase in more than four decades. With an annual rate of 8.7 percent, this historic COLA will significantly increase the maximum Social Security payout.
The maximum is determined by the age of retirement. The maximum payment in 2022 for individuals who retired at their full retirement age was $3,345; those who retired at sixty-two saw a maximum of $2,364; and those who retired at seventy had a maximum benefit of $4,194 per month.
How will retirement plans change with the 2023 COLA increase?
For 2023 the IRS will increase the contribution limit by $2,000 to $22,500. Workers who are saving for retirement with 401(k), 403(b), most 457 plans, and the Thrift Savings Plan can contribute up to $22,500 to those plans in 2023.
For those saving in a traditional or Roth IRA the 2023 limit on contributions rises to $$6,500 next year, a $500 increase.
Americans have several options they can take advantage of when saving for retirement. One such is 401(k) plan through their employer which depending on the type could come with upfront tax benefits or tax-free distributions when you retire.
Named after a section of the US Internal Revenue Code, a 401(k) is a retirement savings and investing plan offered by many American employers. Contributions are automatically taken out of a worker’s paycheck and invested in funds selected by the employee from a list given to them by the plan administrator.
Why is the student debt forgiveness on hold?
A St Louis Court of Appeals ruled that the government could not distribute the support until the states’ legal challenge had been heard. However the White House is arguing that this would leave borrowers in a state of limbo for an unacceptable amount of time, and that they risk racking up further interest on their debts when the student loan moratorium ends on 31 December.
In the administration’s filing to the Supreme Court, Solicitor General Elizabeth Prelogar wrote: “The Eighth Circuit’s erroneous injunction leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations.”
Beyond that, the filing also included a petition from the administration that the Supreme Court hear an appeal against the lower court’s decision. This case would be the one that permanently dismisses the block on Student Loan Forgiveness, if the Biden Administration is successful.
What have experts said?
It’s basically put the program in deep freeze until it proceeds to most likely dismantle it... They think of this as elite, selfish kids getting at the head of the line when others have had to repay their loans.
American students will likely find out the result of the student debt cancellation plan in Spring as the Supreme Court has announced when it is to hear arguments relating to the case.
The nine court justices will hear arguments on 28 February from six Republican states that are challenging the forgiveness as well as two plaintiffs who are not set for any of their debt to be written off. One of these plaintiffs had more than $45,000 of his debt cancelled by the Paycheck Protection Program.
National average gas price 7 cents from going below $3 per gallon
National average for a gallon of gasoline is closing in on being 7 cents away from $2.99/gal- we're at $3.072/gal and falling this morning, down 23.3 cents from a year ago.
National average gas price forecast to drop below $3 per gallon before Christmas
Gas prices are heading down and on pace to drop below $3 per gallon on average nationally before Christmas. Currently, they are just over 7 cents from that mark according to data from Gas Buddy, a tech company that tracks real-time fuel prices at over 140,000 gas stations.
Though the current housing market has been described as terrible, with high prices compounded by high mortgage rates, there may be some poor souls looking to buy. The majority of people will need a loan in order to purchase a house to cover what isn’t paid by the deposit.
Help for those having financial problems with their mortgage payments
The Consumer Financial Protection Bureau is offering help for homeowners and landlords in dire straights with mortgage payments as well as assistance to renters that could be facing eviction.
Good morning and welcome to AS USA
You join us for news on the state of the US economy as we approach Christmas.