USA finance and payments: news summary for 20 April
US Financial News: latest updates
Headlines: Wednesday 20 April
- Bureau of Labor Statistics reports that the the percent of families that included an unemployed worker dropped from 9.8% in 2020 to 6.7% in 2021.
- US natural gas prices surge to a thirteen year high.
- Gas prices are down around $0.20 since its record high in March
- What are the penalties for filing taxes late?
- All you need to know about the fast-rising alternative cryptocurrency, Shiba Inu.
- Some economists believe a more generous tax credit or payment could help households combat inflation.
Helpful information and links
- States with the highest mortgage payments
- Some states begin to offer$1,000 monthly payments for mothers.
- Is E15 gasoline cheaper than other gasoline?
- Background on the three most common mortgages in the US.
Marriage can have some significant consequences for you and your partner after tying the knot, with major changes to your tax-filing statuses that could bring certain benefits.
It can affect how you both file taxes, how your income levels are calculated, which taxes you are liable for, and how much you will both have to pay. Although not always the case, you can enjoy certain financial benefits as a result of a marriage if you decide to file your tax returns jointly.
The IRS has confirmed that it has issued all first, second and third stimulus checks, also known as Economic Impact Payments, but not everyone who is eligible has had their payment. In some cases, the IRS did not have the relevant information on file for some low-income households, so was unable to make the payment.
Those who are missing a payment, or received less than their full entitlement, can claim a back payment in the form of a Recovery Rebate Credit. Here's everything you need to know to claim the money...
"Today, as part of the President’s commitment to tackling the climate crisis, the Biden-Harris Administration is announcing new partnerships and initiatives designed to increase access to these cost-saving local clean energy resources."
"These announcements leverage existing programs, funding, and guidance, including the Bipartisan Infrastructure Law, to unlock resources and pave the way for good-paying jobs in the growing clean energy economy in communities across the country."
Biden heralds fall in unemployment rate
President Biden has seen his approval ratings fall in recent months, largely thought to be in response to the high price of gasoline and other vital commodities. This has hit consumers across the United States, but new figures published today highlight the progress that has been made on the economic recovery. The US' unemployment rate has fallen significantly as the economy continues to return to pre-pandemic conditions, but Biden has so far been unable to pass the long-term economic legislation that he had hoped to enact to ensure greater opportunities for marginalised groups.
In the US, each state has the power to determine how it will generate revenue through taxation. Some states opt to forgo the collection of income or sales tax. There are a total of nine states that do not tax income at the state level.
Child Tax Credit to revert to original form for 2022
As the Child Tax Credit was enhanced for just one year and without further expansion or adoption of Biden’s Build Back Better framework this year, the advanced credit will revert from $3,600 per eligible child to its original maximum amount of $2,000.
With bills and inflation rising this year, a cut to the plan which helped tens of millions of children and families is not going to be helpful.
Despite the end of the tax season for this year passing, having a good grasp of how to properly pay tax is pretty important. You may be part of the group that has an extension to your tax returns and making sure you know the best way to pay your taxes will definitely come in handy.
The coronavirus pandemic is now in its third year, and though it’s still disrupting businesses and negatively impacting the economy, there have been significant improvements since its start in 2020, much thanks to the US government.
The first round of stimulus checks were sent out under the CARES Act in April 2020, giving $1200 per eligible adult and $500 per child. The second round under the Consolidated Appropriations Act gave $600 per eligible adult and $600 per child in December 2020/January 2021. The third round under the American Rescue Plan came quickly after the second, in March 2021 and was the biggest of the three, giving $1400 per eligible adult and $1400 per child. At the moment, there are no talks of a fourth stimulus check, for several reasons.
Watch a short video on the impact the checks have had by AS USA, in our full coverage.
President Biden is calling on Congress to pass legislation requiring the wealthiest American households to pay a minimum of 20 percent on all of their income, including unrealized investment income that currently is untaxed. The richest Americans could no longer do what they can now—and often pay no tax whatsoever or very little tax on their income and too often escape paying income tax forever. The tax will apply only to the top one-one hundredth of one percent (0.01%) of American households — those worth over $100 million, and over half of hundreds of billions raised would come from households worth more than $1 billion.
What were the impacts of the Child Tax Credit
A little after more that a year of its passage, the Tax Policy Center examined the impacts of the enhanced Child Tax Credit. From July to December 2021 families with children were distributed $250 for children older than six and $300 a month for those younger.
The authors conducted a survey with "1,782 American parents eligible for the credit and a comparison group of 2,015 ineligible households." After the interviews, the group found that "that families used the CTC to cover routine expenses without reducing their employment. Eligible families experienced improved nutrition, decreased reliance on credit cards and other high-risk financial services, and also made long term educational investments for both parents and children."
Read more from the Tax Policy Center for more on the findings.
Virginia's govenor moves to remove the state's fuel tax
Recently elected Virginia governor Glenn Youngkin has proposed a suspension of Virginia's fuel tax to bring prices down for consumers. The measure now sits with the legislature. The bill to enact a gas tax holiday has cleared the necessary house committee and is expected to come to a vote in the coming days. In the short-term this could reduce prices by around twenty cents for drivers in the state.
Short term relief adds to long-term problems
The Washington Post explores the dangers of President Biden's moves to reduce fuel costs. While increasing the supply of less refind and more polluting fuels may in the short term bring down prices, they only add fuel to an already burning fire... climate change.
This comes after the Build Back Better bill which included billions for carbon emissions mitigation and climate adaptation funding has been wiped from the radar on Capitol Hill. Additionally, to support Europe in their energy independence from Russia, the US will begin to send billions of cubic meters of liquefied natural gas. While a priority for both parties, this is not a long-term solution has it will have an incredibly high environmental footprint.
Which tax payers have more time to file their tax returns?
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 US and 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.
How can I track my tax refund?
Using the IRS' Where's My Refund tool, one can track the status of their refund twenty-four hours after submitting a return to the agency. You will need to provide your social security number, refund amount, and your filing status for the IRS to be able to find information on your refund.
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. As the majority of inflation is being driven by fuel prices and is not occurring equally across markets, some economists feel it would be beneficial to send a stimulus check to struggling households. Read more.
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.
Good morning and welcome to our financial news live blog. We will be bringing you all the latest news from Washington DC to Wall Street.
Unable to file your taxes and in need of an extension? Looking for how to track your refund? Want to know what Congress is considering to support US households combat inflation? We have you covered.