Tax deadline news summary | 27 March 2023
Inflation Relief: Latest Updates
Headlines | Monday, 27 March 2023
- There is still time to avoid tax penalties by applying for a tax filing extension
- First Republic Bank will purchase the now failed Silicon Valley Bank
- More companies in the United States consider the four-day workweek
- New Yorkers will have until 15 May 2023 to submit their tax refund
Tax Information and Guidance
- The difference between‘accepted’ and ‘approved’ tax returns
- Requirements to receive over $10,000 for the CalEITC & EITC with my tax refund
- How to claim theCalEITC without a social security number
- Can you claim bothEITC and Child Tax Credit?
Under certain circumstances, it is possible to receive up to six months of Social Security benefits in one lump sum. This is known as a retroactive benefit payment.
When you first apply for Social Security retirement benefits, there is a waiting period between when you become eligible for benefits and when you actually receive your first payment. If you are approved for Social Security payments but have been waiting for more than one full month after you became eligible, you may be eligible the retroactive benefit payment.
When to file the 1099-MISC form
You need to file Form 1099-MISC for each person to whom you have paid during the year:
At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
At least $600 in:
Prizes and awards.
Other income payments.
Medical and health care payments.
Crop insurance proceeds.
Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
Payments to an attorney.
Any fishing boat proceeds.
Tax season is drawing to a close and if you run a business then there are a small number of tax forms you need to be aware of. One of these is the 1099-MISC form, which is used for miscellaneous payments made by your company.
If you paid someone who is not your employee, such as a vendor, contractor, or freelancer, and you paid them $600 or more in the course of your trade or business, then you are required to issue a 1099-MISC form to that person and to the IRS.
More employers posting salaries for job openings
Employers are increasingly posting salary ranges for job openings, even in states where it’s not required by law, according to analysts.
Following new legislation in New York City, California, Washington, Colorado, and elsewhere, employers across the country are becoming more transparent about pay in order to stay competitive with companies in states that require employers to post salary ranges, experts say.
A tight labor market and significant increase in remote work have also contributed to the rise.
Student loan borrowers are saddled with payments for their education for many years, but they are at least allowed to deduct a portion of the interest paid on their debt from their taxes.
However, as AS USA's Greg Heilman tells us, the process to do this is a little more complicated this year.
The end of the tax season for this year is coming in a few weeks, and the IRS offers multiple ways for you to pay off your taxes.
AS USA's Oliver Povey tells us about five ways that you can use to pay your taxes.
IRS encourages taxpayers to file electronically for faster refunds
The IRS encourages taxpayers to file as soon as they are ready and choose direct deposit to receive any refund they may be owed.
They say direct deposit is the safest and most convenient way to receive a tax refund.
Taxpayers who file a paper return can also choose direct deposit, but it will take longer to process the return and get their money back.
Rent prices have been increasing for Americans at incredibly high rates since the beginning of the covid-19 pandemic. With real wages falling by 1.3% in the last year there is an intense squeeze on purse-strings.
California is no exception and has the highest average rent prices in the country. Its rental laws mean that periods of high inflation likely mean large price increases for renters, typically the young and the undocumented.
AS USA's Oliver Povey tells us more about the average rent for a house in California, which can vary widely depending on several factors.
Walt Disney begins layoff of 7,000 employees
Walt Disney has begun 7,000 layoffs announced earlier this year, as it seeks to control costs and create a more "streamlined" business, according to a letter Chief Executive Bob Iger sent to employees and seen by Reuters.
Major divisions of the company - Disney Entertainment, Disney Parks, Experiences and Products, and corporate - will be impacted, according to Reuters sources.
The entertainment industry has undergone a retrenchment since its early embrace of video streaming, when established media companies lost billionsas they launched competitors to Netflix.
They started to rein in spending when Netflix posted its first loss of subscribers in a decade in early 2022.
Concerns about inflation and the bank crisis have led to worries that the economy is headed for a recession.
There are some measures that are in place to prevent a financial crisis similar to the one that took place in 2008, and one of these is the Dodd-Frank Act, a comprehensive set of financial regulations that aim to reduce the likelihood of another financial catastrophe.
When it comes to unemployment benefits, not all states are created equal.
Unemployment Insurance provides workers that lose their jobs financial support for a time while they look for a new position but, as AS USA's Greg Heilman tells us, the amount paid varies.
Are you thinking of what profession to study for? Or are you looking for a career change? It would be a good idea to check out which fields will be the most in-demand in the next few years.
AS USA's David Nelson tells us about the top 20 jobs in the U.S. seeing the most growth from now to 2031, according to data from the Bureau of Labor Statistics.
The Affordable Care Act, increased the income thresholds for Medicaid qualification. Recipients of Medicaid support cannot have an income over that threshold, so upping the level made more people eligible for coverage.
There are currently 11 holdout states that have chosen not to offer their residents the expanded Medicaid program, leaving millions in the “coverage gap.” This is a situation where they earn too little to qualify for subsidized health plans on the Affordable Care Act insurance exchanges, but don’t meet their states income requirements for Medicaid.
A report from the Urban Institute found that an additional 3.7 million people would receive Medicaid coverage if those 12 states relented and expanded eligibility.
IRS warns against "dirty dozen"
Scammers increase their presense during tax season since to get support when filing some may be more willing to give our personal financial information.
The IRS wants taxpayers to be aware of these scams, and has compiled a list of the twelve most common, which the agency calls "the dirty dozen."
Before giving out any information to someone reaching out via text, email, or by phone saying they are the IRS, check out this list to protect yourself.
The North Carolina-based, First Citizens BancShares, has announced this morning that they are working with the FDIC to purchase the bridge bank established for Silicon Valley Bank (SVB) in light of its collapse.
SVB, which had been the premier hub for venture capitalists and startups, collapsed this month after an investor-led bank run depleted the financial institution of their deposits, requiring government intervention. The bank then fell into the possession of the FDIC, and after a bidding process, the SVB’s loans, deposits, and assets will be transferred to First Citizens Bank.
Read moreon the acquisition of SVB by First Citizens Bank and how it will impact customers.
Taxes in most states are due on Tuesday, 18 April, giving those in the US a little under a month to complete and submit their return.
Unlike the last two years, the IRS will not be extending the deadline for all taxpayers. Throughout the pandemic, new laws like the American Rescue Plan and the HEROS Act allowed for the sending of stimulus checks and increased the value of key tax credits. To ensure all taxpayers received the correct refund, the deadline was extended to provide the tax authority more time.
Read our full coverage for details on penalties and on how to apply for a extension.
Created in 2007, the Public Service Loan Forgiveness (PSLF) program allows certain federal student loan borrowers to have their debt forgiven after 10 years of working full-time for a qualifying employer. The program is designed to encourage people to work in the public sector so only jobs with the government or 501(c)(3) non-profits qualify.
Borrowers must make 120 timely qualifying monthly payments, ten years in total, under an income-driven repayment plan while working for a qualifying employer. The payments don’t need to be consecutive but you must be working for a qualifying employer when you apply for the PSLF program and at the time the remaining balance on your loan is forgiven. Read more on PSLF in our full coverage.
Deutsche Bank share price has fallen
Deutsche Bank shares have tumbled after the cost of insuring the bank's debt against the risk of default rocketed to more than four-year highs, highlighting concerns among investors about the stability of Europe's banks.
Germany's largest bank has seen $3 billion erased from its market value in the space of just a week.
However, some quarters say it will not go the way of banks which recently failed.
"We have no concerns about Deutsche's viability or asset marks. To be crystal clear - Deutsche is NOT the next Credit Suisse," a report from Autonomous, an independent researcher, said.
According to a Bloomberg report, the downward slide of the bank has been attributed to hedge funds taking advantage of the volatility in the financial sector.
How to claim the EITC and the Child Tax Credit
The EITC is a federal tax refund that is fully refundable, meaning if your tax burden is reduced to $0 then the IRS will pay you the difference. It can be worth nearly $7,000 if all the requirements are met. While having a family increases the amount that can be claimed it isn’t specifically targeted towards them.
The CTC is worth up to 15% of your income, up to $2,000, but is not fully-refundable. It phases out at a much lower level compared to the EITC and is meant for helping nearly all working families with raising children.
Accessing one does not restrict taxpayers from claiming the other.
The 2023 tax season is under way and filers have until Tuesday 18 April to turn in their federal tax declarations for the 2022 fiscal year. The same deadline applies to residents of California to file their state tax returns.
If you are having trouble getting all the paperwork together and need some more time, you can petition for a six-month extension to submit your tax return by 16 October. Note though that you will need to pay any taxes due by the April Tax Day. For those who were affected by the severe weather in California the IRS and California Franchise Tax Board (FTB) have automatically extended the filing deadline to 16 October.
When filing your tax return, you should keep in mind that both the federal tax agency and FTB offer tax credits that could add thousands of dollars to your tax refund. One of them is the Earned Income Tax Credit (EITC), the Golden State specific one is CalEITC. Put together, these two credits could be worth over $10,000.
Hello and welcome to AS USA's live blog on inflation relief and other financial news.
Stocks remained down from their level one month ago. This comes as the Federal Reserve has moved up interest rates once again after the collapse of SVB.
We’ll be providing you with updates on inflation relief measures in the U.S., and keep you posted on the latest developments involving the banking crisis, along with other financial news of the day.
The tax filing deadline is approaching, with taxpayers having less than one month to submit their returns with no penalty. The federal deadline is 18 April, but extensions can be applied for through 16 October.