Relief checks: 4 March summary news
Headlines: Saturday, 4 March 2023
- Stocks close up on Friday as Dow Jones breaks 4-week losing streak
- Experts warn that housing market could fall by 20% in 2023
- Mortgage rates rise for fourth straight week, daily average tops 7%
- Initial unemployment claims down to 190,000, a drop of 2,000
- Eli Lilly to cut price of brand insulin by 70% and generic to $25 per vial
- US Supreme Court considers the legality of Biden's Student Loan Forgiveness plan
- Austin, Texas leads US capitals in terms of falling home prices: where else are prices falling?
2023 Tax Season
- Who can claim the additional standard deduction?
- The way to access IRS transcripts to ensure a faster tax refund
- Did you receive a state stimulus check? No need to report the payment as income to the IRS.
Read more from AS USA:
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/JH6PT4OO4GGQP2V37FGVEIW4ZQ.jpg)
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/TTJVDOWQ3IFHUFJE7ZHY3U5KLM.jpg)
Home prices drop year over year for first time in a decade but are less affordable
The US housing market has cooled significantly since the soaring home prices during the Great Migration fueled by homebuyers bidding up prices across the nation aided by historically low mortgage rates. For the first time in a decade the prices are lower than the previous year down 0.6% according to Redfin data.
The typical US home sold for $350,246 during the four weeks ending February 26. However, the milestone comes as mortgage rates have begun to surge up once again with the daily average topping 7%, while the weekly average hit 6.65%.
The elevated cost of housing coupled with higher mortgage rates has reduced affordability. The typical homebuyer is facing record a high monthly payment of $2,520.
Thanks to the Social Security Administration’s payment calendar, one group of beneficiaries will receive a double payment in March, another three. Here’s who…
There are many situations in which you may need to provide proof of your income, assets and tax liability. Take for example when applying for college financial aid, a mortgage or purchasing a life insurance policy. Americans have two main ways available to them to do so through the Internal Revenue Service.
The disinflation momentum we need is far from certain ... In order to put this episode of high inflation behind us, further policy tightening, maintained for a longer time, will likely be necessary.
Achieving our mandated goals takes time and a broader view. As policymakers, we have to respond to an economy that is evolving in real time and prepare for what the economy will look like in the future.
Earlier this month, the Internal Revanue Service (IRS) warned taxpayers who had received a stimulus check from their state to postpone filing their tax return until the agency determined if these payments counted as taxable income.
The guidance is now available, and for taxpayers in California, the news is good. Because the Middle-Class Tax Refund is classified as a “payment [...] made for the promotion of the general welfare or as a disaster relief payment,” the checks will not be taxed at the federal level.
The tax authority cited the pandemic emergency declaration that the White House as a justification for these payments to be treated as a relief program. Since the White House plans to end the pandemic emergency declaration in May, in the future, these types of payments may be subject to federal taxes. State governments should be aware that when the pandemic state of emergency is lifted, any payments made to their residents are likely to be taxed, and recipients should be informed of that fact to ensure they are not caught by surprise when filing the federal return.
How to check the status of your tax return
The IRS has a tool called “Where’s My Refund” which is accessible online. This allows taxpayers to check the status of their refund after providing their Social Security Number, the refund total, and their tax filing status. Information is available 24 hours after a filing has been submitted. Another good use of the tool is its notifications if there is an error with an application, allowing filers to make changes quickly. This will require your return to be sent electronically instead of paper.
For those who have not seen any changes to their filing status and filed a paper return, the IRS offers a help line which can be reached at 1-800- 829-4477.
There are many considerations that one should take into account when thinking about when to begin to claim Social Security benefits once you’ve become eligible. While it is possible to start once you’ve reached the minimum age of 62, it can come at a cost in the form of longer term reduced earnings.
While the US economy in many respects has recovered from the economic collapse induced by the covid-19 pandemic, the disruptions brought about by the virus are still rippling through the economy. The federal government doled out trillions to keep the economy from imploding including direct stimulus payments to Americans.
However, those measures have been ended but supply and demand imbalances, shocks to the global economy and aftereffects of the pandemic have continued to push the price of basics higher like food and energy over the course of 2022. Since the federal government was no longer stepping up, state governments put in place their own programs last year to help their residents cope with the higher cost of living.
Using budget surpluses they sent their own direct payments, some of which are still arriving. At least one additional proposal is in the works for 2023. Here’s a look at which states are still sending extra money to there residents.
The standard deduction is a central part of the tax-filing process for anyone in the middle of submitting their returns. The IRS allows a certain amount of income to be considered tax-free and so reduce the filer’s tax bill.
In short, the standard deduction is a specific amount that is subtracted from your total taxable income to reduce your tax liability. Each year the tax agency adjusts those limits, but some groups get a bigger-than-average standard deduction amount.
The tax agency is attempting to work through a backlog of unprocessed tax returns and get refunds out to those who require one.
After three years of pandemic-related disruption, the IRS is hoping to process tax returns much more swiftly this year. Early signs suggest that the tax agency is working much more efficiently this year, meaning that tax refunds are arriving more promptly.
Here's what that could mean for you...
What next for the US housing market?
The US housing market looks to be in a precarious position as mortgage rates surpass 7% and the number of sales falls for an 11th consecutive month. There have been some comparisons made to the pre-Great Recession conditions in 2007, but how accurate is this?
“The wild ride known as the US housing market slowed dramatically in the fall of 2022, as mortgage rates surged and home prices remained high,” said Molly Boesel, principal economist at CoreLogic.
“Home sales started strong in early 2022 but took a nosedive later in the year. On the plus side, generous amounts of home equity will protect many borrowers from experiencing the type of foreclosure activity seen during the Great Recession.”
Food stamps, also known as the Supplemental Nutrition Assistance Program (SNAP), are a form of government assistance provided to eligible individuals and families to help them afford nutritious food.
To be eligible for SNAP benefits you must meet certain criteria, such as having a household income below a certain threshold, being a US citizen or legal immigrant, and meeting other program requirements. We take a look at how much is on offer for beneficiaries in 2023...
What is the Fed's plan for inflation?
"We have been taking forceful steps to moderate demand so that it comes into better alignment with supply. Our overarching focus is using our tools to bring inflation back down to our 2 percent goal and to keep longer-term inflation expectations well anchored.
"Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions."
Typical mortgage rates now above 7%
There is little relief for borrowers in the short-term as the 30-year fixed rate mortgage surpassed 7% on Friday. The Federal Reserve has implemented a series of interest rate hike in the past 12 months in a bid to bring inflation under control.
While that effort appears to be working, the rate hikes are proving to have significant consequences for homeowners with mortgages.
The Inflation Reduction Act passed last year provides funding for a number of initiatives designed to boost the economy and quicken the evolution to green sources of energy. One of the key parts of the package is a $7,500 tax credit for filers who purchase a new electric vehicle, bringing down prices considerably.
We take a look at the program and the eligibility requirements to claim the credit...
There's still more than a month to go before the tax deadline for 2023, the date by which the vast majority of filers must have submitted a tax return to the IRS. However if you are late with your submission you could be landed in hot water with financial penalties potentially in store for those who don't submit on time.
We take a look at the fines for late submission...
Why is the housing market so expensive?
Analysts Barchart has calculated that the US housing market is currently less afordable than ever seen previously, as quantified in their affordability index. Data from the National Association of Realtors suggests that the rate of price increase during the early part of the pandemic soared ahead of wage increases and with mortgage rates at a 15-year high there is no relief for prospective homeowners.
Which housing markets are still booming?
The US housing market is expect to contract this year after the pandemic-era boom, but there are some parts where property prices appear set to keep rising. Palm Beach in Florida has become known as the nation's most expensive real estate market and demand appears to be rising in the exclusive region.
This report from CNBC even looks at a huge property that has just gone on the market with an asking price of $218 million, which would be the most expensive Florida property ever sold if it goes at that price.
Social Security is the most widely-received form of federal benefits and is continuing to grow as the US population ages. The Social Security Administration started off 2023 sending over 71 million payments to Americans in the first month of the year.
The agency sends payments to contributors who have been disabled in their work, survivors or workers and the biggest group of all, retired contributors to the program. For those receiving Social Security retirement benefits, here's how much you can expect after reaching 70...
Where's my tax refund from the IRS?
This year the tax agency is working around the clock to speed up the porcessing of tax returns. In recent tax seasons a combination of pandemic-related complications and underfunding meant that there were lengthly delays for filers awaiting their tax refund.
That shouldn't be a problem this year and the IRS is aiming to get refunds sent out within 21 days of the return being received. Here's how you can track the status of yours...
The pandemic boom in the housing market felt in 2020 has created a tumultuous situation in the US economy. This week the Dallas Federal Reserve released an analysis warning that a major readjustment could be on the cards.
Prices in the US are currently way higher than the market fundamentals would suggest and experts believe that house prices could fall by 19.5% this year to bring them back in line with expectations.
What will happen to gas prices in 2023?
One year on from the start of the Russian invasion of Ukraine, crude oil prices have stabilized and the cost of gasoline is 6% lower than a year ago. It will ease the pressure on consumers who have had their households finances affected by inflation.
While good news for commuters, over 75% of whom drive a car to and from work, it could present a hurdle for the Biden administration’s push to get Americans to make the switch to electric vehicles.
Where is my W-2 tax form?
Some prospective filers are reportedly still waiting for their W-2 form to help them submit their tax return. The W-2 form should be provided by your employer with a detailed break-down of your earnings for the previous tax year, but sometimes there can be delays.
If that is the case for you, check with your employer to see if it should be arriving imminently. Failing that, the IRS advises that you can file using the IRS Form 4852 to avoid a late penalty.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/XPMJAHR7K5EJF2QEOU7KORRMB4.jpg)
The IRS has been forced to contend with pandemic-related disruption and underfunding for the past few years. However the tax agency is now once again aiming to get refunds out within 21 days of a return being filed.
Tax refunds are a handy annual cash payment for recipients but for married couples expecting a refund, there may be an extra complication. If one member of the couple has outstanding debts that may offset their shared refund, meaning that the other will lose out financially.
Here's what you can do about it...
Welcome to AS USA!
Good morning and welcome to AS USA, where we'll be bringing you all the latest financial news and information this Saturday. We're in the middle of tax season and experts are predicting a major drop in the US housing market for 2023.