USA finance and payments news summary: 19 April
Financial news headlines | Tuesday, 19 April
- IRS tax return deadline has passed in most states - how can I request an extension?
- Residents in Maine and Massachusetts have until the end of today, Tuesday 19 April, to file taxes
- Average mortgage repayment is on the rise after interest rates increase to 5%
- Economists call for a one time tax credit or stimulus check to help Americans struggling with high rate of inflation
- President Biden lifts ban on high polluting E15 gasoline in a bid to lower fuel costs for consumers
- California legislature proposes new bill for a 32 hour work week: who is for and against the measure?
Helpful information & links
- How can I get a W-2 form from a previous employer?
- Typically Tax Day is April 15th,why was it moved to the 18th this year?
- $1,000 monthly payments for mothers: where is it available?
You can apply for a six-month tax return deadline extension, although you will still have been required to submit any outstanding payments on time.
There are two main forms of financial penalties that the IRS can impose on those who miss the deadline: the Failure to File Penalty and the Failure to Pay Penalty.
What has the government said about student debt forgiveness?
Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for. Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR plan.
Some support for student debt
Officials say the 40,000 borrowers under the Public Service Loan Forgiveness Program will see “immediate debt cancellation,” as part of changes that inches students toward large scale debt forgiveness.
"Inequality in America is 1/4 of our people with zero savings set aside for an emergency and half our people living paycheck to paycheck, while the billionaire class got $1.7 trillion richer over the course of the pandemic. Yes, we need an economy that works for all of us".
Taxpayers who automtically qualify for a filing extension
Apart from residents in Maine and Massachuesetts, most US taxpayers had until yesterday's deadline to file their 2021 tax return. However, some individuals automatically qualify for an extension. Disaster victims, those serving in combat zones and those living abroad automatically have more time to file.
Victims of the December 2021 tornadoes and flooding in Arkansas, Illinois, Kentucky and Tennessee have until Monday 16 May 2022 to file their 2021 returns and pay any tax due, as do victims of Colorado wildfires and straight-line winds that began 30 December. In addition, victims of severe storms, flooding and landslides that began on 4 February in Puerto Rico will have until Wednesday `15 June 2022, to file and pay.
Military service members and eligible support personnel serving in combat zones have at least 180 days after they leave the combat zone to file their tax returns and pay any tax due. This includes those serving in Iraq, Afghanistan and other combat zones. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces' Tax Guide, available on IRS.gov.
US citizens and resident aliens who live and work outside the US and Puerto Rico have until Wednesday 15 June 2022 to file their 2021 tax returns and pay any tax due.
The special 15 June deadline also applies to members of the military on duty outside the USand Puerto Rico who do not qualify for the longer combat zone extension. Affected taxpayers should attach a statement to their return explaining which of these situations apply.
The deadline for submitting tax returns with the IRS was Monday, 18 April, but it is not too late to take advantage of the tax agency’s filing extension. Certain groups, such as residents in states who experienced a natural disaster during the past year, who will automatically be granted extra time for their filing.
Here's what you need to know about the tax-filing extension for 2022...
Extended deadlines for filers in Tennessee
The IRS mad clear that they would not be implemented another national extension for all filers, as was the case last year, but residents in some areas will get a little longer to submit their taxes. Tennessee has experienced severe winter storms, destroying a considerable amount of the state's infrastructure and having a disastrous impact for many residents. They have been granted an extension, giving them longer to file their tax returns.
Biden turns his attention to bio-fuel alternatives
"I’m here today to talk about the work we’re doing to lower costs for American families and put rural America at the center of our efforts to build a future that’s made in America. And that’s not hyperbole; it’s about being made in America.
"A lot of that has — has to do with this industry. I just had a chance to see the work you do here — and turn more than 40 million bushels of local corn into 130 million gallons of ethanol a year. That’s a lot of gallons."
Sen. Warnock proposes gas price legislation
Legislation proposed by Sen. Raphael Warnock and a group of five other Senate Democrats aims to reduce the cost of gas across the US by removing some of the tax normally levied against the fuel. The bill, entitled the Gas Prices Relief Act, would provide a temporary exemption through 2022 from the excise tax on gasoline (other than aviation gasoline)."
It has been a challenging couple of years for many in the United States but support has been available to many taxpayers across the country through various tax credits and assistance from the Internal Revenue Service (IRS). One example of this is the Earned Income Tax Credit (EITC), which, according to the IRS, ‘helps workers and families with low to moderate incomes’.
However not everyone is aware of their eligibility for the program, meaning they could be missing out on thousands of dollars every single year. Here's everything you need to know...
NBC report shows the reason for IRS delays
Tax day 2022 has now passed but the hard work for the IRS is far from over. The tax agency has a huge backlog of unprocessed tax returns that still need to be completed and this delay will undoubtedly result in millions of Americans being forced to wait to receive their tax refunds. If you are yet to file you taxes and have taken advantage of the IRS filing extension, these tips will help you to get your money as promptly as possible.
Is the tax system in the US fair?
Much has been made this tax season of the enormous amounts of tax evasion that are committed by the wealthy 1% of Americans, allowing them to pay a lower rate of tax than many low-income households typically pay. The super-wealthy are often better able to limit the amount of tax they pay to an absolute minimum using sneaky accounting tricks to muddy the waters and hide their true income.
IRS feels the effects of years of budget cuts
Across the past two years there have been numerous problems with funding for the IRS, which have consequentially affected the speed with which the agency is able to process tax returns and send out refunds to filers.
The IRS has reported serious staffing shortages as the US faces one of the busiest tax filing seasons in history. With many families available for additional benefits and credits, more households are filing a return, and the IRS is struggling to keep up with the workload.
This comes as the tax authority has reported a backlog of thousands of paper returns from 2019 and 2020 that must be evaualted by hand, which takes time. For this reason, the IRS highly encourages filers to submit their returns electronically as they are assured to get their refunds more quickly; especially if they provide direct deposit information.
As inflation continues to rock the United States, many households are losing purchasing power. Prices are up on average 8.5 percent compared to last year, with increasing fuel costs driving the surge.
To offset these increases in price, some economists have floated the idea of a “one-time “inflation adjustment” tax cut for lower- and middle-income households.” Economists Joseph Stiglitz believes that this tax cut “could be financed by taxing the monopoly rents of the oil, technology, pharmaceutical, and other corporate giants that made a killing from the crisis.”
The covid-19 pandemic has caused mass upheaval in the workforce and prompted tens of millions of Americans to re-evaluate their employment situation. With this in mind, two California lawmakers have proposed significant changes to the Golden State’s workweek.
The idea is to reduce the current 40-hour workweek by eight hours for companies with over 500 employees. They and supporters say that it will increase productivity and profits while opponents call it a “job killer” creating an “untenable” situation for many businesses.
Can I still claim a tax deadline extension?
If you need more time to submit your tax return of 2021, the IRS offers the chance to claim an extension which will give you up to six months more to complete your returns. However, this will not spare you from any unpaid taxes that you still owe and you will begin to accrue interest on those outstanding payments, but it might buy you some time and prevent more serious punishments.
What next to address the high price of gasoline?
The average prices of gasoline has fallen slightly in recent weeks, dropping after reaching a historic peak in March in response to new sanctions placed on Russian imports. To mitigate the effect of the ban on Russian fuel, President Biden has eased restrictions on forms of US-made gasoline to allow greater supply to enter the market and keep prices fairly low.
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