USA finance and payments live updates: $2,753 monthly check, tax deadline, gas stimulus check, Social Security disability benefits...
Taxpayers now have just one week to submit 2021 tax returns or file for an extension, we’ll bring you filing updates and other financial news.
Headlines 11 April 2022
- Mortgage interest rates set to increase to 5 percent, how will it impact home buyers?
- In 2021 housing prices increased by an average of 18 percent, could a bubble be forming?
- Social security reforms could mean a $2,753 monthly checkcould be coming to many senior households.
- Connecticut, Georgia, and Maryland have all suspended their state fuel taxes.
- Social Security benefits have lost 32 percent of their purchasing power since 2000, which organizations are pushing for reforms?
Information and Useful links
Tax Filing Deadline: Monday 18 April 2022
- Need an extension?Here is our guide.
- All you need to know about the Earned Income Tax Credit.
Federal Programs
- Requirements to register for SNAP.
- Social Security Disability Insurance: an overview of how the program varies by state.
How states calculate how much child support should be awarded to a custodial parent to be paid by the non-custodial parent varies across the nation. Generally though, one of three models will be used to determine the base child support amount due.
Under federal law, states are required to establish guidelines to create a uniform method of calculating child support throughout each state, but there is no national set of guidelines creating a wide disparity in amounts awarded from state to state. The guidelines must be publicly available and reviewed every four years.
Those who find themselves dismissed from their job through no fault of their own may be able to claim unemployment compensation. The amount of compensation that they can expect to receive varies widely from state to state.
Although the unemployment insurance system is a federal-state joint venture, beyond some basic federal mandates the states can run their programs with a fairly free hand. This means that there is no uniform set of rules to qualify, nor types of workers who are eligible to file a claim.
IRS will reimburse households up to $8,000 for child and dependent care expenses
Families with children will need to file a 2021 tax return this year if they want to receive any money they are eligible for from the enhanced Child Tax Credit. When you are filing though, you will want to check out other tax credits that were beefed up under the American Rescue Plan.
One may be of particular interest to families that have older dependents as well as children they claim on their tax filing. Although the Child Tax Credit gives taxpayers up to $3,600 per child, the Child and Dependent Care Credit could be worth up to $8,000 for a family with two or more children or dependents. Half that amount if they have just one.
In order to access any of the credits available you must file a 2021 tax return, the deadline is Monday 18 April, less than two weeks away.
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Lower costs, not lower wages, to fight inflation
US Representative Katie Porter of California took to the House floor to warn that past approaches of lowering wages to reduce inflation are misguided. She wants her Congressional colleagues to take action on a number of fronts to lower costs on energy, food and healthcare, among other things.
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54 years ago, the landmark Fair Housing Act was signed into law to protect every American from discrimination when buying or renting a home. There's still much more we can do to expand access to affordable housing and help secure housing justice for all.
54th anniversary of the federal Fair Housing Act
A week after Martin Luther King Jr was assassinated, President Lyndon B Johnson signed Title VIII of the Civil Rights Act of 1968, also known as the Fair Housing Act, on this day 54 years ago. The legislation protects people from all forms of discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities.
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Knowing the right government agency to file a consumer complaint
The Federal Reserve is raising awareness of your rights as a consumer what you can do to file a complaint with your financial institution or a merchant. They recommend the fastest way to resolve any issue is to contact the the customer service staff of the merchant or financial institution which you have had a problem.
However, if they fail to resolve the complaint you will need to contact the appropriate regulatory agency to file a formal complaint.
You can find the regulator for your financial institution on the FFIEC Consumer Help Center
For complaints about:
A bank, credit card, or online bank, contact Federal Reserve Consumer Help
A credit union, contact National Credit Union Administration
An online merchant, contact the Federal Trade Commission
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Gas prices continue downward trend, could drop below $4 per gallon
The price of gas has been making a slow but consistent march down from their peak at $4.331 national average per gallon on 11 March. Gas Buddy anaylst Patrick De Haan has predicted that they could go below $4 per gallon, possibly as soon as next week.
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Leaving the grip of the covid-19 pandemic was supposed to herald an exciting future, free of the shackles of lockdowns, business closures and record unemployment. However, the current situation is far from that. Inflation is spiking at levels not seen in 50 years, and it is not expected to slow down anytime soon.
In reaction, the Federal Reserve raised interest rates for the first time in two years in a bid to curtail the rise in prices. While its effect on inflation may not be felt for another year, the interest rate rise is already being felt by those who are trying to borrow money. Namely, prospective homeowners.
Check out the latest tax tips
The IRS develops this yearly special tax time guide designed to help people understand how tax changes affect themyearly and how to file an accurate tax return.
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During 2020 and 2021 the federal government sent out three rounds of stimulus check payments for eligible households, with a maximum of $3,200 available per person.
Previously it was possible to claim any missing payments using the IRS’ Get My Payment online portal, but that option has now expired. To request payment of any outstanding stimulus check money you must now claim a Recovery Rebate Credit on your federal tax returns.
There is now just one week to go until tax filing day 2022, the date by which you have to submit your tax return to the IRS to avoid being hit with late fees and potentialy missing out on forms of financial relief. The deadline this year is Monday 18 April. If you're not sure which tax bracket you fall into, here's everything you need to know...
30-year fixed mortgage rate surges over 5%
The average rate on a 30-year fixed mortgage is now above 5%, standing at 5.06%, a 1.76% YOY change, according to Mortgage News Daily. The 30-year Fixed rate crossed the 5% last week, the first time it has reached such levels since 2011, apart from a couple of days in 2018. It stood at 3.38% one year ago today.
US house prices are expected to rise by a further 10% this year, after a 17% surge in the price of an average home last year. Record low interest rates and a scarcity of homes to buy, combined with unexpectedly explosive demand during the pandemic have sent prices skywards.
Prices are forecast to rise 5.0% next year and 4.1% in 2024, marginal upgrades compared with 4.0% and 3.7% in the last poll, based on the Case/Shiller index.
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Warren feels Biden could have gone further with his billionaires tax
Senator Elizabeth Warren hailed President Joe Biden’s efforts to introduce a new tax on the country’s wealthiest households, but says he could have been stricter on those who can afford to pay more tax and generally pay less than those who can't. Under Biden’s proposal, the Billionaire Minimum Income Tax (BMIT), the top 0.01% of households, those worth over $100 million on earned income and unrealized gains would pay 20% tax.
“What Democrats are saying is that we’ve got a plan to try to raise taxes on the millionaires and billionaires, the people at the top who aren’t even paying taxes at the same rate as everyone else,” Warren told Squawk Box.
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How to get an automatic six more months to file your 2021 tax return
Individuals who are unable to file their tax return by this year's 18 April deadline can request an extension to complete their return. Taxpayers who need more time to complete their return can ask for an automatic six-month extension to file. An extension allows for extra time to gather, prepare and file paperwork with the IRS.
However, being granted an extension to file does not mean that taxpayers have more time to pay any tax owed. They should estimate and pay any owed taxes by the regular deadline to avoid any possible penalties.
The deadline to submit 2021 tax returns or an extension to file and pay tax owed this year falls on Monday 18 April 2022. Taxpayers in Maine and Massachusetts have an extra day - until Tuesday 19 April 2022, to file their returns due to the Patriots' Day holiday in those states.
Use IRS Free File to electronically request an automatic tax-filing extension. Taxpayers can electronically request an extension on Form 4868. Filing this form gives taxpayers until Monday 17 October to file their tax return. To get the extension, taxpayers must estimate their tax liability on this form and should pay any amount due on time.
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Those receiving Social Security benefits can count on their monthly payments being adjusted annually to account for inflation. This is especially important to maintain purchasing power for older Americans who often live on a fixed budget, as rising prices hit their pocketbooks harder.
This year the Social Security Administration implemented a historic cost-of-living adjustment (COLA) of 5.9 percent, the highest in decades. The increase will raise the average monthly amount that the agency pays individual retired workers to $1,657 and couples that both receive benefits to $2,753 according to agency estimates.
However, there are calls for changes to be made as inflation outpaces COLA increases and steps will need to be taken to ensure the long-term solvency of the program.
Russia’s invasion of Ukraine will have global economic spillovers, IMF
The IMF warns that the war that Russia is waging on Ukraine will have reverberations around the globe through faster inflation and slower growth.
The two nations account for 30 percent of global wheat exports, as well as other foodstuffs like cooking oils. Food costs have been soaring around the globe. Likewise, the price of energy has skyrocketed. Both of these will put further pressure on inflation which could possibly lead to unrest in some regions.
The war has caused additional disruptions to trade and supply chains that had been hammered by the covid-19 pandemic. Finally, emerging markets could see major capital outflows as central banks tighten fiscal policy, along with market volatility due to investor wariness and lower business confidence.
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Fed to raise rates aggressively in coming months, say economists
The Federal Reserve is expected to deliver two back-to-back half-point interest rate hikes in May and June to tackle runaway inflation, according to economists polled by Reuters who also say the probability of a recession next year is 40%.
With the unemployment rate near a record low, inflation the highest in four decades and a surge in global commodity prices set to persist, most analysts say the Fed needs to move quickly to keep price pressures under control. The latest April 4-8 Reuters poll of more than 100 economists forecast two half-point rate rises this year, the first such move since 1994, taking the federal funds rate to 1.25%-1.50% by the June meeting. That brings the end-year prediction from the March Reuters poll at least three months forward, and more in line with interest rate futures pricing.
A strong majority, or 85 of 102 economists, forecast 50 basis points in May, and a still-solid majority of 56 said the Fed would follow up with 50 basis points as well in June. 'Given the shift in official commentary and with inflation pressures visible throughout the economy, we believe the Fed will deliver half-point interest rate increases at the May, June and July policy meetings,' said James Knightley, chief international economist at ING. While the central bank, chaired by Jerome Powell, is likely to gear down to quarter-point moves in the second half of this year, the federal funds rate is now expected to end 2022 at 2.00%-2.25%, 50 basis points higher than the median forecast in a poll taken last month.
Respondents to an additional question gave a median one-in-four chance of a US recession in the coming year, rising to 40% over the next 24 months. The bond market is already showing signs of recession concerns. Inflation as measured by the Consumer Price Index (CPI) was predicted to have peaked at 7.9% last quarter, and average 6.8% this year, a significant upgrade from 6.1% in last month's poll. The US labor market was expected to further tighten after unemployment dropped to 3.6% last month, only slightly above pre-pandemic levels and what it is forecast to average in 2022.
The jobless rate was predicted to average 3.5% next year and stay there in 2024, roughly in line with the Fed's own optimistic view and not consistent with respondents' concerns about recession. Growth forecasts were downgraded across the board. The economy was expected to grow 3.3% and 2.2% this year and next respectively, down from 3.6% and 2.4% predicted last month.
Earned Income Tax Credit could add extra money to your tax refund
The Earned Income Tax Credit (EITC) is designed to offer support for low- and middle-income households. As a general rule, the credit is larger for filers with lower incomes and the amount on offer is typically the biggest for families with children.
The EITC can be claimed on your tax return to reduce the size of your tax bill or increase the size of any refund you may be owed. Important changes were made to the credit for the 2021 fiscal year, increasing the amount available to taxpayers, as well as expanding eligibility.
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Good morning and welcome to AS USA's daily live blog on the latest financial news in the US.
The deadline for Americans to file their 2021 federal tax return or request a six-month extension is fast approaching. Most US taxpayers have until Monday 18 April to submit their 1040 Form with the IRS. Likewise, most states require residents to file state income tax returns on the same day.
Those that ask for an extension will have until 17 October 2022 but must pay any taxes due by the April deadline.
We'll also be looking at the state of gas prices in the country and the possibility to replace the Child Tax Credit, among other fiancial news coming out of DC and around the nation that could affect your pocket book.