Stimulus checks news summary | 27 February 2023
US Finance Feed: Latest Updates
Headlines: Monday, 27 February 2023
- US GDP grew 2.7 percent in the fourth quarter of 2022
- Personal income in the US rose 0.6 percent in January
- NASDAQ down 17 percent compared to this time last year.
- Differences between a stimulus checkand a disaster relief check
- Federal government pushes to enroll seniors in SNAP benefits, formally known as food stamps, as inflation cut into retirement benefits
A few cities are piloting universal basic income to evaluate the policy and its various structures better.
Austin, Texas leads US capitals in terms of falling home prices: where else are prices falling?
2023 Tax Season
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.
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Can a spouse inherit a 401(k) plan?
If the account owner is married and the spouse is named as the primary beneficiary of the 401(k) then the spouse has several options for withdrawing the funds:
Roll over the funds into their own 401(k) plan.
Leave the funds in the 401(k) plan and take distributions over time with annual required distributions, though this is limited if the account owner died in 2020 or later.
Withdraw all funds within 5 years after the owners death, if they died before 2020.
Withdraw all funds within 10 years after the owners death if the owner died in 2020 or later.
or take a lump sum distribution.
The rules regarding who can inherit a 401(k) and how the funds can be withdrawn depend on a few different factors, such as the account owner’s age, the beneficiary designation on the account, and the specific provisions of the 401(k) plan.
It’s important to note that there are also generally tax implications associated with withdrawing funds from a 401(k) plan, regardless of who inherits the account.
In the case of the death of an account holder there are lots of options for spouses and other family members to receive the plan.
While pensions have become a thing of the past for many Americans, and most people relying on much more volatile 401(k) and IRA plans, the same is not true for former presidents.
After leaving office each one is entitled to a healthy pension plan which at present adds up to around half of the $400,000 that was claimed in office.
The IRS offers tax breaks and additional filing time for filers who have suffered some form of emergency in the past year.
After several natural disasters and severe storms have battered parts of Alabama, California, and Georgia, federal and state tax authorities have extended the tax filing deadline. However, residents of these states should be aware that the extension may not all apply to all counties.
How many IRS refunds have been sent out?
The tax agency received billions of dollars in extra funding this year to help speed up the rate of returns processing, and it looks like that effort is paying dividends. The IRS has refunded 11.8% more money to taxpayers than it had done at the same stage last year. This despite the fact that the average refund amount is expected to be lower.
The IRS may pay interest on late refunds, but this interest is based on the amount of time that has passed since the original filing deadline, not on the amount of time the IRS took to process and pay your refund.
Additionally, there are limits on the amount of interest that the IRS is required to pay, and not all late refunds qualify for interest payments. Here's what that could mean for your refund if you're forced to wait to receive the payment...
Has the housing market hit the bottom?
The US housing market has been in decline for much of the past year, following a period of price rises during parts of the pandemic. High interest rates, a consequence of historically high inflation, have increased the price of mortgages and reduced demand for homes. However analysts now believe that the housing market may be starting to level out, good news for those looking to sell in 2023.
Earlier this month the IRS confirmed that the various types of state-funded relief payments distributed in 2022 will not be subject to federal taxes. 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.
In their statement the IRS cited the pandemic emergency declaration that the White House as a justification for these payments to be treated as a relief program. We take a look at what you should do if you had already paid taxes on those payments...
White House works to increase internet access
High-speed internet has become an essential tool to access education, healthcare, and work. Still, too many are left without high-speed internet because of lacking infrastructure, costs or the lack of skills to utilize the technology. This is particularly notable in communities of color, rural communities and among older Americans where the lack of affordable, reliable high-speed internet is compounding economic, health and other disparities.
That’s why President Biden and Vice President Harris worked with Democrats, Republicans, and Independents to include a record $65 billion in the Bipartisan Infrastructure Law to expand “Internet for All” — so that everyone in America has access to reliable and affordable high-speed internet. The Administration also secured critical funding for affordable high-speed internet in the American Rescue Plan and general appropriations laws. The Administration’s efforts are centered around three principles—access, affordability and equity. Across the laws, Internet for All programs will build high-speed internet infrastructure, teach digital skills, and provide necessary technology to ensure that everyone in America has the access and skills they need to fully participate in today’s society.
Median house prices fell in January
The median price of a home sold in the United States fell 8.2 percent to $427,000 in January.
This dramatic decrease was not seen in the average home price, meaning that more expensive properties may be maintaining a higher price point.
As interest rates increase, some buyers, particularly those with fewer resources, can be priced out of the market. As demand falls and supply remains constant, prices fall. This trend is expected to continue over the coming months as higher interest rates increase the price of mortgages for many buyers.
According to the National Council On Aging (NCOA) there were more than 5 million older adults did not have access to healthy food in 2019. More than 10% of over people over 65 live in poverty in the United States.
Supplemental Nutrition Assistance Program (SNAP) is a lifeline for these people. Benefits are transferred to Electronic Benefits Transfer (EBT) cards. The average SNAP benefit for a one-person senior household is $104 per month.
”We have the resources to ensure that all people can live without the threat of deprivation,” said NCOA’s Ramsey Alwin. “But we need the political will to use them.”
Tips to receive your tax return faster
Once your tax filing has been sent it can be an anxious wait to see if you will be the recipient of a tax refund. The IRS has already briefed that refunds will be lower this year, with the data now released to support this. We are a month into tax season so if you filed your return at the beginning of the season it should have been processed.
If it hasn’t arrived yet it means you have made an error as it should take 21 days for the IRS to send your refund. Making sure all your information is correct is the only guarantee that the refund can be sent as any error will slow down the prcoess.
A bill to provide a stimulus check worth up to $500 for those who filed their 2021 and 2022 tax return has passed the Georgia House of Representatives. This is a renewal of a tax credit enacted last year that kicked in when both 2020 and 2021 tax returns were submitted.
Now, it is up to the Georgia Senate to determine whether millions will see between $250 and $500 tacked onto their tax refund. The bill passed in the House by a huge margin, 170 to 2, which indicates a high chance of passing in the upper chamber.
The extension of this credit was a key pillar of Republican Governor Brain Kemp’s re-election campaign that he won in November. With Georgia voters delivering him the victory, Gov. Kemp is working to make good on these commitments.
Do universal basic income plans work?
Criticism of the idea comes from the extra governmental spending needed to pay for it as well as thinking it could disincetivise work. However, researchers at MIT and Harvard found that programmes like UBI had little impact on employment behaviour. Plans such as those espoused by Andrew Yang in the 2020 presidential elections would have given Americans $12,000 a year which, while not being enough to live on, would give Americans a financial backstop if they were made redundant.
UBI in a different form was shown in the stimulus checks and enhanced Child Tax Credit that supported Americans in the covid-19 pandemic. The money kept Americans afloat when they needed support the most.
“We have more than enough data now to prove that cash works,” says Michael Tubbs, mayor of Stockto, California and an early adopter of UBI trials. “What is the data or talking points that we need to get to the policymakers ... to move their hearts?”
Happy Monday, and welcome to AS USA's live feed covering the latest financial news from Washington DC to Wall Street.
We will bring you updates on student debt relief, the 2023 tax season, news from the Federal Reserve, and much more.
Later this week, Chairmen of the Federal Reserve Jerome Powell is expected to announce further interest rate increases. This comes after more than half a million jobs were added in January and the Consumer Price Index traced an increase in average prices of 0.5 percent.
The Bureau of Labor Statistics will release the February Employment Report on Friday, providing another data point on the state of the labor market.