USA finance and payments: summary news April 21
US Financial News: latest updates
Headlines: Thursday 21 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.
Related News
The IRS has confirmed that all first, second and third stimulus checks have now been sent out and they will not be sending out any more waves of the payments. However is you were missed out of the support, also known as Economic Impact Payments, you can still claim a back payment by filing a tax return.
Those who are missing a payment, or received less than their full entitlement, can claim a Recovery Rebate Credit on their 2020 or 2021 federal tax return. Here's everything you need to know...
Millionaires are less likely to face tax audits from the IRS
IRS Commissioner Charles Rettig has faced some tough questions fom lawmakers this week as the tax agency looks to wrap up filing season 2022 as swiftly as possible. While the IRS is tasked with processing the backlog of outstanding returns, there is a more long-term concern that the agency is not prioritising its actions correctly. Speaking here, Rep. Katie Porter states that the IRS is now less able to go after wealthy individuals and ensure they pay a fair rate of tax due to significant funding deficits.
Bitcoin appears to have recovered slightly from a dip at the start of April as the price rose back above $42,000 earlier this week. Cryptocurrency experts have pointed to a number of potential causes for the short-term hit suffered by the famously volatile coin, but the recent tax returns deadline seems like the most likely.
Ahead of tax day on 18 April many investors may have redeemed some of their crypto holdings to pay their taxes, pushing the price down as a result. Here's how that has affected the price of some of the most popular cryptocurrencies on the market...
Biden celebrates low veterans unemployment
In recent months the economic progress made during the first few months of the Biden administration appeared to be slowing, and the continued period of high inflation reduced the buying power of consumers. However in the last few days a bout of positive jobs data may have improved the situation for President Biden and his team have been quick to share the figures.
Yellen tells EU not so fast on banning Russian oil
The European Union is considering sanctions on Russian oil exports, including an embargo, to further punish the Kremlin for invading Ukraine. No move to boycott Russian oil imports will be put in place until after the French presidential elections have concluded to avoid adversely affecting incumbent Emmanuel Macron's chances.
The US Treasury Secretary Janet Yellen on Thursday questioned such a move, warning it could do more harm than good. Although she agrees with the need of Europe to reduce its dependence on Russian oil, over half of its oil exports go to Europe supplying roughly a quarter of the continents needs, "we need to be careful when we think about a complete European ban," she said.
"Counterintuitively, it could actually have very little negative impact on Russia, because although Russia might export less, the price it gets for its exports would go up," Yellen said. She also cautioned that those higher prices "would have a damaging impact on Europe and on other parts of the world."
2021 Child Tax Credit had dramatic positive impact on eligible families
Research into the impact of the advance payments from the 2021 Child Tax Credit found that they supported eligible families in critical ways. Families were able to cover routine expenses for essentials including housing, food and utilies among other things. At the same time families were able to save or pay down debt reducing overall economic insecurity.
The payments also lowered households dependence on alternative financial services such as "reliance on payday loans, pawn shops, and selling blood plasma to make ends meet." The researchers didn't find any noticeable differences in employment patterns between those households that were eligible and ineligible.
Low and moderate income households that received the payments were actually more likely gain new professional skills implying that the monthly boost to finances ecouraged beneficiaries to develop themselves and seek a higher quality of life. This group also invested in their children's future through better nutrition, childcare and education.
Many coins have been extremely volatile throughout the pandemic and the recent tax filing deadline appears to have affected the price of cryptocurrencies.
Wall Street drops as Fed chair Powell indicates half point interest rate hike in May
All three major Wall Street indexes ended lower on Thursday as Federal Reserve chair Jerome Powell voiced that the central bank would move more aggressively to tame high inflation starting with a half point rate hike when policymakers meet in early May.
He also signposted that another similar jump could come in June. Speaking at a discussion of the global economy at the meetings of the International Monetary Fund "It is appropriate to be moving a little more quickly," Powell said.
The official deadline for most taxpayers to file 2021 tax returns was 18 April 2022, but days prior to that date around 66 million filers had yet to send in their tax declaration. Not to fret though, the IRS is still accepting taxpayers’ annual income reports and the sooner you file the better.
The IRS urged all Americans, even those who are not required, to file this year, especially given the enhanced tax credits that were available for the 2021 fiscal year.
The agency advises those taxpayers who owe taxes to “file now to limit penalties and interest.” Taxpayers that don’t owe taxes will not be penalized for filing late and can still claim the Child Tax Credit for the 2021 tax year.
Don't miss out on 2021 Child Tax Credit
The 2022 tax filing deadline has passed, but the IRS is advising taxpayers that missed the deadline that they can still submit their tax declaration's for last year's income.
Taxpayers have until 17 October to use the agency's Free File to prepare and file 2021 tax returns electronically.
For the first time in history, many families with children in Puerto Rico will be eligible to claim the Child Tax Credit. It was made fully refundable for the 2021 fiscal year, so any portion of the credit that exceeded taxes owed would be added to your tax refund.
Taxpayers could claim up to $3,600 per child under six and $3,000 for each child six to seventeen at the end of the 2021 fiscal year.
AOC says don't blame Biden for high gas prices
US Representative Alexandria Ocasio-Cortez says polticians and fossil fuel advocates are using a window of opportunity created by high gas prices to pressure President Biden to crank up production and use of US fossil fuels supplies.
She counters that it is not the President's fault that energy prices are high, blaming the pain at the pump on companies that set the prices.
She's like to see the US invest in going green to help households transition to solar power and subsidize clean energy techonolgies just as it does for the fossil fuel industry to the tune of billions of dollars.
The reality behind high gas prices
Politicians on Capitol Hill from both sides of the aisle are trying to score points with the high price of gasoline. Republicans are blaming President Biden's policies, while Democrats are blaming energy companies.
The Brookings Institute says that both are barking up the wrong tree, and are doing a disservice to the American public. Although the current situation is complex, the rising prices can be traced back to a glut created when demand plummeted during the covid-19 pandemic, shutting off the taps leading in turn to a shortage as production struggles to catch up with resurgent demand.
Additionally, Putin's invasion of Ukraine added even more upward pressure to prices with buyers wary of being associated with the belligerent Russia further constraining global supply. OPEC nations are could open the taps more to make up for the difference but so far they haven't, partly not to get involved and partly to recover lost income.
Despite being controlled by the US for more than a century, Puerto Rico has never been granted full statehood. It is classed as a territory, meaning the island is allowed to be governed in a totally different way to the other 50 states in the US.
This means that the US government can effectively treat Puerto Rico how they want, and the latest Supreme Court ruling against equal Social Security benefits proves this.
Puerto Ricans will not be able to receive Social Security payments as per Supreme Court ruling
In the contiguous US, citizens are eligible for SSI payments when their monthly earnings drop below $750 a month. In Puerto Rico, where the people are also US citizens, they cannot earn more than $65 a month. To compound this, the average benefit on the island is a meager $77 a month, compared to the average in the US of $533 a month.
In comparison, a person in Texas would receive ten times more than someone in Puerto Rico from their job and SSI benefits combined, if they were working just under the threshold.
44 percent of Puerto Ricans live in poverty, far higher than any state in the US.
Social Security disability payments (SSDI) are not usually taxed, unless you are receiving enough to be over a threshold of $25,000.
Furthermore, there are a number of disability tax benefits that can be applied for when you file your taxes.
Minor change in US jobless claims last week
Jobless claims have fallen slightly to 184,000 in mid-April and stayed near a 53-year low. New filings decreased by just 2,000 people.
Layoffs are extremely low thanks to the tightest labor market in decades. While job take up is high, wage growth continues to lag behind the rapid inflation in the US economy.
It may not cross your mind when upcoming nuptials are being planned, but marriage can have some significant consequences for you and your partner in terms of taxation after tying the knot.
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.
Here’s four key tax benefits for married couples
Those who are missing a payment, or received less than their full entitlement, of the third stimulus check can claim a back payment in the form of a Recovery Rebate Credit on their 2020 or 2021 federal tax return. Although the tax deadline for 2020 and 2021 returns have both passed, the tax agency gives filers up to three years from the due date of the return to file and receive a tax credit refund.
A couple of tax articles now
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.
Despite tax season ending a couple of days ago, staying on top of your taxes remains as important as ever.
WATCH: Bernie Sanders attacks big corporations
The veteran senator has long been a defender of workers in America. Sanders made the remarks while sitting as chairman on the budget committee.
What is involved in the new student debt forgiveness plans?
New plans for student loan forgiveness were revealed this week, though their scope is small and underambitious. One of the ideas is that after 20 years, student loan borrowers can get student loan forgiveness for their college student loans. No mention was made for large scale forgiveness, a key campaign pledge.
Though Biden has the power to strike down all student debt with executive action, he has been hesitant to do so. It is believed he does not want to be defeated in court over the matter. This will not come as any reprieve to the millions of Americans with staggering amounts of debt, however.
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.
White House announces new green energy economic initiatives
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.
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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.