Posts made in September 2021

Make certain to add the Social Security Numbers for your children and other dependents on your return. Otherwise, the IRS might deny any dependent credits that you might be due, including the Child Tax Credit. If you don’t have the number you need by the tax filing deadline, the IRS suggests filing for an extension rather than sending in a return without a Social Security number.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁸

8. ^{IRS.gov, 2021}

Stocks weakened ahead of this week’s Federal Reserve meeting and amid persistent concerns about the Delta variant’s impact on the economy.

The Dow Jones Industrial Average was flat (-0.07%), while the Standard & Poor’s 500 fell 0.57%. The Nasdaq Composite index lost 0.47% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.65%.^1,2,3

Stocks Struggle

Despite a string of economic reports painting a healthy picture of the U.S. economy, investor sentiment remained cautious. While tamer inflation and higher-than-expected retail sales may typically be constructive for the market, any investor enthusiasm it generated was fleeting.

The market appeared all week to be encumbered by a tentative, apprehensive mood. The Delta variant remained an overhang, but it was more than that. Investors appeared concerned about September, which historically has been a weak month for stock prices. The market also was concerned about fiscal and tax policy proposals emanating from Washington D.C., news of an economic slowdown in China, and by what the Fed may announce following its September 21-22 Federal Open Market Committee meeting.

Taking the Economic Pulse

A series of economic reports released last week provided investors with a broad snapshot of the state of the economic recovery.

Inflation showed signs of moderating, rising 0.3%—an elevated rate, but well below June and July’s increases of 0.9% and 0.5%, respectively. The consumer remained strong as retail sales rose 0.7%, an unexpected jump. Manufacturing reached pre-pandemic, while the labor market continued its recovery, with initial jobless claims coming in near pandemic lows and continuing claims hitting a new pandemic low.^4,5,6,7

1. ^{The Wall Street Journal, September 17, 2021}
2. ^{The Wall Street Journal, September 17, 2021}
3. ^{The Wall Street Journal, September 17, 2021}
4. ^{CNBC, September 14, 2021}
5. ^{The Wall Street Journal, September 16, 2021}
6. ^{MarketWatch, September 16, 2021}
7. ^{The Wall Street Journal, September 16, 2021}

Tax Information for Members of the Military is on the main page on IRS.gov where people can go to find links to helpful info, resources, and services. The page includes resources and forms that both current and former military members, combat service, and disabled veterans might need.

Military members should check their eligibility for military tax benefits because their military status can affect whether they are eligible for certain benefits.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁶

6. ^{IRS.gov, October 19, 2020}

In a quiet week of news, stocks moved lower amid simmering concerns over the Delta variant’s effect on the progress of economic reopening.

The Dow Jones Industrial Average declined 2.15%, while the Standard & Poor’s 500 dropped 1.69%. The Nasdaq Composite index fell 1.61% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.63%.^1,2,3

Stocks Weaken

In a holiday-shortened week of trading, markets were choppy as investors grew cautious in the face of a potential Fed tapering decision later this month and the impact of Delta on the economic recovery.

What little news there was, it was decidedly mixed. Job growth showed real strength coming off a shaky employment report the previous Friday, while the Producer Price Index surged by 8.3% year-over-year, representing the largest annual increase since November 2010. The release reminded investors that inflation remained a market risk. Stocks tried to stage a rebound on Friday before sagging to close out the week.

Jobs Improvement

After a disappointing employment report, two labor market reports last week appeared to show that the labor market recovery appeared intact. The JOLTS report (Job Openings and Labor Turnover Survey) showed 10.9 million open jobs, a number that exceeded the number of unemployed by more than two million. The rate of hiring, however, decelerated, perhaps explaining why the August employment report fell short of expectations.⁴

A day later the weekly initial jobless claims fell to a new pandemic low of 310,000, coming in below its four-week moving average of 339,500. Continuing claims fell to their lowest level since March 14, 2020.⁵

1. ^{The Wall Street Journal, September 10, 2021}
2. ^{The Wall Street Journal, September 10, 2021}
3. ^{The Wall Street Journal, September 10, 2021}
4. ^{CNBC, September 8, 2021}
5. ^{CNBC, September 9, 2021}

Whether you need a copy of your tax transcript for a mortgage, student loan, or other financial need, the IRS makes it easy to request a tax transcript online.

To request a tax transcript, you should know what type of transcript you need. The transcript types are:

• Tax Return Transcript
• Tax Account Transcript
• Record of Account Transcript
• Wage and Income Transcript
• Verification of Non-filing Letter

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁶

6. ^{IRS.gov, February 20, 2021}

Stocks were mixed last week amid conflicting economic data and continued spread of Delta variant infections.

The Dow Jones Industrial Average slipped 0.24% during the five trading days. But the Standard & Poor’s 500 tacked on 0.58% and the Nasdaq Composite index rose 1.55%. The MSCI EAFE index, which tracks developed overseas stock markets, gained 1.51%.^1,2,3

Mixed Market

Investors gravitated toward the high growth technology and communication services sectors, as well as the more defensive sectors, such as utilities and real estate. Reopening stocks were weighed down by Delta variant fears and a retreating consumer, while energy struggled to bounce in the wake of Hurricane Ida shutting down energy production and refining capacity.⁴

Stocks appeared to shrug off a shaky employment report on Friday, despite the questions it raised about economic growth in the months ahead.

Mixed Employment

After initial jobless claims reached a new pandemic low on Thursday, the August employment report on Friday came in below expectations as payrolls expanded by 235,000. Adding to the subdued report was a 4% decline in the number of hours worked by employees. On the positive side, the Friday report showed the unemployment rate fell to 5.2%, while wage growth rose 0.6% from July and increased 4.3% from August 2020.⁵

The weak employment report may reflect a pause in hiring due to the Delta variant. It could additionally muddy the outlook for the Federal Reserve, which has indicated it may begin tapering before year-end. The uncertain jobs picture may force the Fed to push its tapering start date into 2022.⁵

1. ^{The Wall Street Journal, September 3, 2021}
2. ^{The Wall Street Journal, September 3, 2021}
3. ^{The Wall Street Journal, September 3, 2021}
4. ^{ALPS Portfolio Solutions Distributor, September 3, 2021}
5. ^{CNBC, September 3, 2021}

There’s no better time to check your withholding status and make sure your paycheck accurately reflects the taxes you should be paying. These paycheck checkups are a great practice when something happens in your life that may change your tax status, such as getting married or getting divorced, having a baby, getting a new job, or getting a raise or promotion at work. You can also adjust your withholding status if you just want to change how much tax is withheld due to other circumstances.

During your paycheck checkup, you can also check other factors such as how much you’re contributing to your health insurance or 401(k). These expenses can also impact your tax liability.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁵

5. ^{IRS.gov, September 19, 2020}

The stock market powered to record levels last week amid talk of Fed tapering and a deceleration in new Delta variant cases.

The Dow Jones Industrial Average gained 0.96%, while the Standard & Poor’s 500 increased 1.52%. The Nasdaq Composite index led, picking up 2.82%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.39%.^1,2,3

Pushing Higher

Stocks surged to begin the week as investor sentiment improved on news of the FDA’s approval of its first COVID-19 vaccine, a strong housing number and comments by the Federal Reserve Bank-Dallas president that he would support delaying tapering if the Delta variant spread worsened.

Stocks continued their climb through midweek, pushing the S&P 500 to another record high and the NASDAQ Composite above 15,000 for the first time. The S&P 500 and NASDAQ Composite closed the week at record highs following Fed Chair Powell’s comments that Fed is likely to begin winding down its monthly bond purchases (aka tapering) by year-end, though no interest rate hikes were imminent.⁴

Powell Speaks

At last week’s Jackson Hole Economic Policy Symposium, Fed Chair Jerome Powell’s speech on Friday provided further insights into Fed plans to begin tapering. Powell said that the Fed may likely commence tapering prior to year-end, adding that the wind down of bond purchases should not be seen as a signal for future rate hikes. Powell emphasized that labor market conditions remain short of the Fed’s target for maximizing employment. He also reiterated his case for why inflation remains a transitory phenomenon.⁴

With a number of Regional Federal Reserve Bank presidents already supportive of tapering, investors may see more definitive steps coming out of next month’s FOMC (Federal Open Market Committee) meeting.

1. ^{The Wall Street Journal, August 27, 2021}
2. ^{The Wall Street Journal, August 27, 2021}
3. ^{The Wall Street Journal, August 27, 2021}
4. ^{CNBC, August 27, 2021}