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There's no doubt that 2022 was a difficult year for residents across the United States of America. Two years of enforced lockdowns due to the pandemic, followed by the sanctions imposed on Russian oil imports meant a cost of living crisis.
While the Federal Reserve has gradually increased interest rates to stimy the rapidly growing inflation rate, residents were also still relying on a host of state executed welfare measures, either through the form of stimulus checks or tax rebates.
However, with 2023 fast approaching, the department of Internal Revenue Services (IRS) has stated that they will not be issuing any further stimulus checks from their end, meaning that American citizens across the country should be braced for a tough financial year ahead.
What did the IRS say about 2023 stimulus checks?
With people starting to wonder what support might be coming their way for 2023, the IRS sent out a bulletin on November 22, 2022, addressing the impact of the absence of stimulus checks on the current tax year.
"Refunds may be smaller in 2023," the memo stated.
"Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no Economic Impact Payments for 2022."
What does the IRS' statement mean for you?
The memo from the IRS clearly indicates that residents should not depend on tax rebates to help them procure basic necessities such as groceries.
With COVID-19 now firmly behind us, the absence of stimulus checks will be a problem going forward, while families will also no longer have the expanded benefits of welfare schemes such as parent/Child Tax Credit, that was available in 2021.
This time last year, those who hadn't claimed such benefits already were able to do so when filing their tax returns, but it won't be the same this time around.
I'm an enthusiast with a deep understanding of the topics related to economics, fiscal policies, and government financial programs, especially in the context of the United States. To demonstrate my expertise, let's break down the concepts used in the provided article:
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2022 as a Difficult Year: In 2022, the United States faced significant challenges, primarily due to the COVID-19 pandemic and subsequent lockdowns. These lockdowns disrupted the economy and had a severe impact on the lives of American citizens.
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Sanctions on Russian Oil Imports: The article mentions sanctions imposed on Russian oil imports. This refers to the restrictions placed on the importation of Russian oil into the United States as a response to geopolitical tensions. Such sanctions can have repercussions on energy prices and supply.
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Cost of Living Crisis: The combination of pandemic-related disruptions and the impact of sanctions led to a cost of living crisis. This means that the general cost of essential goods and services, like housing, food, and fuel, rose significantly, making it harder for people to make ends meet.
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Federal Reserve and Interest Rates: The Federal Reserve is the central bank of the United States. It mentions that the Federal Reserve increased interest rates. This is a monetary policy tool used to control inflation. When interest rates rise, borrowing becomes more expensive, which can help curb inflation.
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State-Executed Welfare Measures: State governments implemented welfare measures to support their residents during difficult times. These measures often included providing stimulus checks or tax rebates to individuals and families to help them cope with financial hardships.
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Department of Internal Revenue Services (IRS): The IRS is the federal agency responsible for collecting taxes in the United States. In this context, the IRS plays a crucial role in distributing stimulus checks and managing tax-related matters.
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2023 Stimulus Checks: The article discusses the absence of stimulus checks in 2023. Stimulus checks are direct payments from the government to individuals or households to stimulate economic activity or provide financial relief during times of crisis.
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Refunds and Tax Refund Size: The IRS memo mentions that tax refunds may be smaller in 2023. Tax refunds are the money that taxpayers receive back from the government when they have overpaid their taxes during the year. The absence of stimulus checks in 2022 affects the amount of money that individuals can expect as tax refunds.
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Economic Impact Payments: Economic Impact Payments are a specific type of stimulus payment provided to Americans during the COVID-19 pandemic to alleviate financial hardships. The absence of such payments in 2022 affects the tax refunds in 2023.
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Parent/Child Tax Credit: The article also mentions that families will no longer have the expanded benefits of welfare schemes such as the Parent/Child Tax Credit. This credit is a government program that provides financial support to parents, helping them with the costs of raising children. The availability and terms of such credits can change from year to year.
In summary, the article discusses the economic challenges faced by the United States in 2022, including the absence of stimulus checks in 2023, the impact on tax refunds, and the changes in government welfare programs like the Parent/Child Tax Credit. These topics are crucial for understanding the financial landscape and government policies affecting American citizens.
