USA finance and payments live updates: $2,753 monthly check, tax deadline, gas stimulus check, Social Security disability beneficts...
Headlines 10 April 2022
- As inflation leads to an increase in the cost of fuel, food, and other basic goods states are proposing and passing legislation that would send checks to residents.
- Housing prices increased eighteen percent last year, leaving many worried that a real estate bubble is forming.
- Many on Social Security are calling for an increase in payments amounts as inflation cuts into their purchasing power.
- New Mexico passes a law to send a direct payment to residents to offset inflation, could your state be next?
The budget proposed by the White House calls for an increases on the tax rate of billionaires and large corporations.
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.
Elizabeth Warren "would have gone further" on Biden's billionaires’ tax
Senator Elizabeth Warren is in favour of Joe Biden’s efforts to introduce a new tax on the country’s wealthiest households, but says she would have been stricter with the president's billionaires’ tax, which would require those earning over $100 million to pay 20% tax on their income.
“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,” she told Squawk Box.
Which states have the lowest unemployment rates?
The BLS has reported that in February, unemployment rates fell in 31 one states. The lowest rates were seen in Indiana, 2.3 percent, and Kansas, 2.5 percent. The remaining 19 states saw the number of unemployed workers held steady.
White House responds to question over their support for a gas tax holiday
Let me ask a very quick question, then, on costs, if I can. Right now, the cost of gas in this country, on average, is $4.14. Does the White House want a gas tax holiday?
MS. PSAKI: Is it certainly on the table and certainly something we continue to consider. We have seen a number of states do that. And while, you know, it can have an impact — about 18 cents, I believe, if I remember correctly — one of the reasons why we’re considering it — our primary focus, to date, as you all know, has been taking steps to increase supply and get it — get more supply into the global marketplace. But it remains an option under consideration.
The S&P CoreLogic Case-Shiller US National Home Price Index reported that in 2021, home prices increase by eighteen percent, partially driven by historically high inflation. Representing the largest increase in thirty-four years, market growth at the same level in 2022 should not be expected.
None the less, these figures have many worried that a real estate bubble may be forming. One of the main features of a real estate bubble is that they are difficult to identify until they pop. This does not mean, however, that there are no warnings.
Historically low-interest rates, the increase presence of institutional investors in the market, housing vacancy, and more have all contributed to unprecedented growth in the value of the market. Read more on how institutional investors have contributed to a possible bubble in the real estate market.
How much did inflation increase in March?
After seeing inflation decrease slightly in January, figures from February alarmed many as the BLS tracked a 0.8 percnet increase in the Consumer Price Index. Much of increase occurred before the Russian invasion of Ukraine, meaning that the March numbers could top the record of 0.9 percent seen in October.
The BLS will release the full Consumer Price Index report on 12 April, but already projections are estimating historic increases. UBS has reported that they believe the year over year change in the CPI will move from the 7.9 percent to 8.5 percent. This would mean that in March, prices increase on average 0.6 percent, down slightly from February levels.
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.
Complex cryptocurrency market ripe for scammers to steal your money
Cryptocurrency has been around for just over a decade and the spectacular rise in values of the novel financial asset has attracted many new investors. Putting money into digital currencies, of which their are now thousands, can be a risky proposition. Not just due to the volatile swings in valuation but also the thieves looking for any opportunity to separate victims from their money.
In many cases the victims have no recourse being duped into signing their money over. President Biden signed an executive order at the end of March for a "whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets."
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.
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.
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.
Inflation worries weigh on three quarters of Americans
Nearly half of respondents to a new CNBC + Acorns Invest in You survey said that they are constantly thinking about inflation. Three quarters were worried that they will have to reconsider financial choices in the near future.
Inflation hit 7.9 percent in February compared to a year ago, resulting in the average US household shelling out an extra $296 per month. This has made American reduce some of their normal expenses. Over half of respondents said that they were eating out less, followed by driving less and canceling monthly subscriptions.
There's little over a 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 18 April. If you're not sure which tax bracket you fall into, here's everything you need to know...
Average US gas price could drop below $4 per gallon
The average price of a gallon of gas in the US began a near unabated march upward at the end of 2020, spiking to $4.33 on 11 March as a result of concerns over Russia's invasion of Ukraine and sanctions that were imposed on Moscow. Since the record high peak prices have been gradually coming down once again with the average price on Sunday at $4.116 per gallon according to AAA.
Oil and gasoline analyst at GasBuddy Patrick De Haan is predicting that the price will continue to go lower, dropping below $4 a gallon within two weeks.
The federal government requires that states set guidelines for how child support amounts are determined. However, they generally have a free hand setting their own rules, meaning significant differences from one state to the next.
According to a Custody X Change study of state formulas to calculated typical monthly child support payment, the lowest was almost $800 less than the highest. Determining the amount also don’t generally reflect the cost of living for a particular state.
The US Social Security Administration announced a historic increase for the 2022 COLA that will see certain beneficiaries receive up to $2,753 on average.
What states have elimianted gas taxes?
Three states, Connecticut, Georgia, and Maryland have either eliminated state gas taxes or passed a gas tax holiday.
Connecticut
In late March, Gov. Ned Lamont announced that the state would suspend taxes on gasoline through 30 June. The state had a gas tax of $0.25.
Georgia
The Georgia state government has passed a law that the cut the state's 29.1 cents gas tax.
Maryland
Also in late March, Maryland also eliminated 36.1-cents-per-gallon gas tax for through 18 April.
Before the Russian invasion of Ukraine, fuel prices were already on the rise and the war has only pushed them up even further.
The US, which is not a major importer of Russian energy resources has banned imports to place pressure on President Putin’s regime in hopes that he will abandon his efforts in Ukraine. To offset the impact of the shortage President Biden announced that over the next six months, one million barrels of oil will be released from the nation’s strategic reserves each day.
At the state level, governments are proposing and passing legislation to provide direct relief to residents. These proposals vary widely from fuel tax holidays like those seen in Connecticut, Georgia, and Maryland to direct cash payments like in New Mexico. Additionally, various states aiming to increase ridership on public transit systems have cut prices by up to seventy-five percent to give commuters more options that do not involve using their cars.
Read more for details on other proposals ciruclating in several states.
Welcome to AS USA
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 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 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 pcoket book.