Stimulus checks news summary | 2 March 2023
US Finance: Latest Updates
Headlines: Thursday, 2 March 2023
- Mortgage rates rise for fourth straight week, daily average tops 7%
- Initial unemployment claims fall by 2,000 to 190,000 for the week ending on 25 February
- IRS sends 90% of tax refund payments within 21 days
- Eli Lilly to cut price of brand insulin by 70% and generic to $25 per vial
- Consumer confidence slumps in February
- US Supreme Court heard oral arguements on legality of 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:
Americans have until 18 April 2023 to file their 2022 income declarations and pay any taxes they may owe to Uncle Sam. Filers can submit a request for an extension until 16 October to turn in their paperwork, but they aren’t off the hook for any money they may owe. You need to pay any balance due, to the best of your knowledge, that you owe by Tax Day.
Filing your tax return late if you owe money to the IRS can be an expensive proposition. Not only could you face penalties for filing late but you will also face late payment penalties and interest to boot.
The 2023 Child Tax Credit is available to parents with dependents under 17 as of 31 December 2022 and who meet certain eligibility requirements. In 2021, the American Rescue Plan made big changes to the credit for one year that helped many families by allowing them to receive half of the value of the credit over six months rather than as a bulk sum when they file their taxes.
We take a look at the Child Tax Credit for this year, and who is eligible to receive the support...
Medicaid expansion in North Carolina “will provide help for so many”
This is something that we can all be very proud of. What a huge announcement this is for North Carolina. What a huge policy direction this is that will provide help for so many in this state, but it’s going to do it in a way that’s fiscally responsible.
North Carolina Legislature reaches agreement to expand Medicaid
North Carolina is one of 11 states that still hasn’t expanded Medicaid through the Affordable Care Act. However, that could soon change after legislative leaders announced an agreement to expand access to hundreds of thousands of additional low-income adults on Thursday.
The deal is a milestone for Republican lawmakers, many of whom have opposed the expansion for over a decade. A vote on the adoption of added healthcare coverage most likely won’t happen until the end of the month at the earliest. If passed, the state would start providing expansion coverage to those eligible starting January 2024.
Mortgage rates rise for fourth week in a row, median payment hits record high
Freddie Mac reported that the weekly average for a 30-year fixed mortgage rose to 6.65% for the week ending 2 March. That is the fourth week straight of increases. Thursday also saw the daily average hit 7.1%.
The higher rates, coupled with the elevated median-asking-price, meant that the monthly mortgage payment was $2,520 at the current weekly average, an all-time high. Monthly mortgage payments are up 28% ($556) from a year ago according to Redfin.
Mortgage-purchase applications during the previous week ending 24 February dropped by 6% from the week before. When seasonally adjusted, purchase applications hit their lowest level since the early 1990s, down 44% from a year earlier.
The Federal Reserve has denied the presence of a wage-price spiral, but recent comments from the central bank’s leaders indicate a change in messaging.
Read more on what central bank policymakers are saying about a wage-price spiral and what it will mean going forward.
Initial unemployment insurance benefit claims drop
Defying forecasts, first time claims of jobless benefits dropped by 2,000 last week to 190,000. It had been predicted to increase to 195,000. On the other hand, the 4-week moving average increased slightly to 193,000.
February's job report is due out Friday at 8:30 and economists are forecasting strong growth once again, but not as high as January's surprise 517,000 jobs added.
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Last year, inflation in the United States reached historic levels. Given the high prices, several entities approved the sending of stimulus checks or tax refunds as relief. Although inflation has fallen in recent months, the support continues. We share with you which states will send payments in March and what the amounts are.
All eyes are on the US Supreme Court as the justices begin to hear oral arguments regarding the constitutionality of President Biden’s student debt relief program. The question in the case examines the authority of the Department of Education to forgive student debt for loans that were issued by the federal government.
The court’s opinion, while the final word on the president’s executive order issued last summer, is not the deciding factor in the legality of future laws or proposals to assist borrowers and address the student debt crisis.
Read our full coverage for details on what the justices said in response to the oral arguments presented earlier this week.
Tax-filing season can be a stressful time with the sense that a misplaced tick on your return could cost you money. One of the most important parts of your tax return is your filing status and you should really consider which option is right for you.
Filers are sometimes unsure about the differences between ‘single’ and ‘head of household’ status, although the latter can offer significant tax benefits if you are able to claim it. We take a look at what you need to do to take advantage of head of household status...
How to track 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 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.
Anyone aged 65 or older at the end of the tax year is able to claim an additional standard deduction which for 2023 is $1,500. If you are 65 or older and file as a single filer or unmarried head of a household, the additional standard deduction is upped to $1,850.
What next for mortgage rates?
Typical mortgage rates rose once again in the United States last week at a point when investors would be hoping to see an uptick in demand. The Spring season generally sees the housing market pick up in the US after quiet winter months, but demand for property has fallen to a 28-year low.
The proposal included in the Build Back Better bill caps the amount people with diabetes spend on insulin at $35 a month if they receive healthcare through the government or a private insurance company. This means the new insulin prices will have no affect for Medicare as they are the same. Should prices increase again in future then this Medicare limit will once again come into force.
However, people under private insurance are not affected by the $35 cap and are still at the mercy of the companies. This amendment to include private cover was voted down by Republican senators.
A knock-on effect for insulin expected
News from pharmaceutical company Eli Lilly of plans to cut prices of insulin look set to change the market in the US. With prices brought down to levels that are the most they can be paid for by new Medicare plans is ample evidence of what everyone already knew; companies have been taking Americans for a ride when it comes to the cost of medicine.
Prices brought down by one company are likely to force others to follow suit or be priced out of the market.
Consumers across the country have been subject to the changing tides of the US economy in recent years, with a sudden pandemic-enforced downturn followed by a period of rampant growth. The economic recovery has been good for the jobs market but disastrous to consumers, who have had to contend with rapid inflation pushing up prices.
With that in mind, it was no surprise to see consumer confidence fall in February...
When will the Supreme Court decide on Student Loan Forgiveness?
The Court has heard arguments on two separate lawsuits brought against Biden’s debt relief plan, but that does not necessarily mean borrowers will need to wait for two decisions. The Supreme Court could issue a ruling on both in a single decision, particularly considering the similarities between the two cases.
However even if they choose to issue a single ruling, it will take around three months for the process of draft opinions to be authored, distributed and amended within the Court. Typically, the Supreme Court delivers rulings on the biggest cases in late June.
There are multiple tax credits that American’s can take advantage of this tax season. One of these is the Retirement Savings Tax Credit. This is related to retirement accounts such as the 401(k) and the Roth plans.
This measure helps taxpayers who have moderate incomes and who contribute to their retirement plans. In this case, a deduction is made and up to $2,000 can be requested for this measure.
American drivers spending less at the pump than in 2022
The price of gasoline spiked last summer as uncertainty over crude oil supplies brought turmoil to world markets. Russia’s invasion of Ukraine and subsequent sanctions on the major oil producer helped push prices above $5 per gallon on average in June 2022.
A year after the start of the conflict though, crude oil prices have stabilized and the cost of gasoline is 6% lower than a year ago, albeit 2% higher than in January. 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.
Biden plans to raise “some taxes” but without breaking campaign pledge
President Biden will release his budget proposals to Congress 9 March. On Tuesday he offered a glimpse of what he plans to include to fulfil his pledge to cut the deficit by $2 trillion over 10 years.
"I want to make it clear. I'm gonna raise some taxes," Biden said at an event in Virginia. "I'm going to lay down in detail every single thing, every tax that's out there that I'm proposing, and no one ... making less than $400,000 is going to pay a penny more in taxes."
Biden pledged during his 2020 campaign for the White House that he would not to increase taxes on people making less than $400,000 a year.
Eli Lilly slashes the price of its insulins, caps out-of-pocket costs to $35 per month
Eli Lilly announced on Wednesday that it would drop the price for two of its most commonly prescribed forms of branded insulin, Humalog and Humulin, by 70%. Those price decreases will be effective starting in the fourth quarter of 2023.
However, its non-branded insulin, Lispro, will see its price cut from over $82 to $25 a vial effective 1 May. That’ll make it the lowest list-priced mealtime insulin available.
Effective immediately, Lilly is capping out-of-pocket costs for customers to $35 at participating retail pharmacies for people with commercial insurance that use the pharmaceutical company’s insulin. Those that don't have insurance can use its Insulin Value Program to purchase Lilly insulins for no more than $35 month.
Eli Lilly cutting insulin prices to "make a real difference for Americans with diabetes"
While the current healthcare system provides access to insulin for most people with diabetes, it still does not provide affordable insulin for everyone and that needs to change. The aggressive price cuts we're announcing today should make a real difference for Americans with diabetes. Because these price cuts will take time for the insurance and pharmacy system to implement, we are taking the additional step to immediately cap out-of-pocket costs for patients who use Lilly insulin and are not covered by the recent Medicare Part D cap.
Pharmaceutical manufacturers Eli Lilly announced today that they are going to cap the price of insulin at $35 per month in a major win for those with medical requirements.
“While the current healthcare system provides access to insulin for most people with diabetes, it still does not provide affordable insulin for everyone and that needs to change,” said Eli Lilly Chair and CEO David A Ricks.
“The aggressive price cuts we’re announcing today should make a real difference for Americans with diabetes.”
Mortgage rates continue to rise in the US
Applications for new mortgage agreements have fallen to a 28-year low today as interest rates continue to rise for homeowners. The housing market have undergone a tumultuous few years of boom and bust but a series of interest rate hikes by the Federal Reserve have made mortgages unattainably expensive for many prospective buyers.
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Universal basic income (UBI), sometimes known as guaranteed income, would provide a regular payment to citizens whether they were in work or not.
The idea behind it is that it would decrease poverty and allow people to have a level of money without any dictation from salary or benefits. Outside of raw economics it would give people the chance to work less and live more fulfilling lives in being able to choose jobs they want to do rather than what they have to do to survive.
Here are the US cities invovled in UBI programmes.
Good morning and welcome to AS USA!
It's nearly the end of another week in US politics. While there has been few notable changes to the economic outlook, one area of relative positivity is the slashing of insulin prices that companies are undertaking, after a certain amount of threats from progressive democrats.
We will keep you across that news as well as other developments.