The first few months of 2022 have left many people in the United States wondering what financial support is on offer, with stimulus checks now firmly in the past while some programs, like the expanded Child Tax Credit, have not yet been renewed. In this March 17 live blog, we will bring you the latest news and updates on the financial situation in the USA and what is on offer.
The COVID-19 pandemic has not gone away but now no longer carries the same threat as it did, so many of the programs available are for more general needs, such as helping citizens against the rise in inflation, the increase in gas prices and so on.
Increase in mortgage rates reaches 2019 levels
Mortgage rates rose above 4%, which hasn’t happened since May 2019, as a result of the Federal Reserve moving to curb inflation.
The move ends the Fed’s pandemic-era easy money policy after the central bank announced it would raise interest rates for the first time since 2018
The 30-year fixed-rate mortgage averaged 4.16% in the week ending March 17, compared to 3.85% the previous week.
Social Security payments with COLA 2022
There are millions of Social Security recipients across the USA who have begun to receive increased payments this year thanks to the 5.9 percent cost-of-living-adjustment (COLA) increase.
The most recent payments went out on March 16 to those retirees born between the 11th and the 20th of the month. Anyone born from the 1st to the 10th has already had their money come through this March, while those with a birthday between the 20th and the 31st of the month will see their money arrive on March 23.
There are approximately 70 million Americans claiming Social Security payments, with the aforementioned 5.9 percent rise due to the COLA, which is a 1.3 rise compared to last year. Also, the maximum amount of money subject to the Social Security tax has also increased, going from 142,800 dollars in 2021 to 147,000 dollars in 2022. The Social Security tax rates are staying the same, which is 6.2 percent for employees and 12.4 percent for self-employed workers.
Read more about the latest batch of Social Security Payments.
Gas Prices
As a result of Russia‘s invasion of Ukraine and the subsequent sanctions put upon Vladimir Putin’s country, gas prices in the USA have risen at a sharp rate.
In fact, for the first time in a decade, gas prices even went as high as four dollars a gallon. The previous high was set at 4.103 dollars per gallon back in 2008, but now a new high has been set with 4.104 dollars.
Nevertheless, oil prices are continuing to fall. In the last week the oil price decreased by 30 percent, following the spike caused by Russia‘s invasion of Ukraine.
Read more about the Rising Gas Prices.
Mileage Reimbursement Rates
The Internal Revenue Service (IRS) has announced the standard mileage rate for the use of an automobile for business, charitable, medical or moving purposes
Taxpayers are advised to apply for the standard mileage rate in the first year that they are using the car for business purposes. Then, they will have the option to choose between this rate and the actual expenses.
The new rates came into effect back on January 1, 2022, and they are related to the use of cars including vans, pick-ups and panel trucks.
Read more about the Mileage Reimbursement Rate in 2022.
IRS Tax Refunds
Many people across the USA will have been keen to get in their tax returns on time, knowing that down the line they are likely to receive a tax refund.
After all, the sooner that it is filed, the sooner you will get a refund. Since tax season got underway on January 24, the Internal Revenue Service (IRS) have returned at least 78 billion dollars to the US public.
In February 2021, the average tax refund was 2,880 dollars. However, this year it is 3,536 dollars on average. Therefore, the average amount received as a tax refund has increased 23 percent compared to last year.
Read more about IRS Tax Refunds.
Child Tax Credit
The expanded Child Tax Credit payments has now come to an end in the United States, having been made available during the second half of 2021.
Families were able to receive 3,600 dollars for each child aged under the age of six, and 3,000 dollars for each child aged between six and 17. There was then the option to either receive half of this money on a monthly basis, or it could be received as a full lump sum once the individual had filed their 2021 taxes.
However, this expanded program has not continued into 2022 after an agreement could not be struck across all Democrats to support Joe Biden’s Build Back Better initiative. In particular, Sen. Joe Manchin was the opposing vote that caused the plans for the expanded Child Tax Credit program to fall through.
Read more about the plans with Child Tax Credit.
Interest rates
Given the way in which prices are rapidly rising in the USA, the US Federal Reserve have taken the decision to raise interest rates for the first time since 2018 in a bid to bring things back under control.
The benchmark rate will be lifted by 0.25 percent by the US central bank, and they have warned that further rate rises could follow in the months ahead. This comes against the rise in inflation in the USA, which hit a 40-year high of 7.9 percent in February.
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